[Editor's Note: This is a guest post submitted by a regular reader, a physician who wishes to remain anonymous. Although it doesn't apply to me, and hopefully won't for a long time, I did pick up a few pearls I didn't know before reading it. This is one of the best written and researched guest posts I've ever received. As with all guest posts by readers, I expect you to be very nice in the comments section. Guest posters rarely have as thick of skin as I have, and I like to encourage these types of submissions. I have no financial relationship with the author.]
My life in a nutshell goes something like this: went to med school, met the love of my life, got married, had kids, built a wonderful life together as a two-physician couple. We were together almost 30 happy years. Looking back on it, this life seems almost like a fairy tale. Except for the ending, when she died unexpectedly in her early 50’s. That was two years ago.
I am certainly not an expert on the financial aspects of losing one’s spouse, but I feel moved to write this guest post because the loss of a spouse is among the most earth-shattering experiences a human can face, and, in the weeks and months following such a loss, at a time when the world seems most dreary, the surviving spouse is thrust into the position of having to make financial decisions with enormous ramifications for one’s future security and livelihood. I hope that sharing my experiences navigating these bleak waters can help others who may someday experience a similar devastating loss.
The take-home messages of this post are: 1) be prepared and 2) don’t panic. Being prepared means that you have taken care of estate planning in advance, your financial records are up to date, you can locate all vital documents, and you have an action plan that you can execute even when you are numb with grief, exhausted, and surrounded by grieving children, family and friends. Not panicking means that there are few things that must be dealt with immediately. Force yourself to take plenty of time before making any major decisions. A good rule of thumb is to wait about a year before deciding to sell the house, take a new job, move to a new city, or make major purchases with life insurance payouts. Also, plan to take off at least 2 weeks from work, preferably longer, as dealing with these issues will take even longer than that. Also, make sure you have plenty of minutes on your cell phone plan. You will burn through them.
The remainder of this post is basically a list of topics that need to be addressed after the death of a spouse, with focused comments based on my personal experience. Several topics are of special relevance to physicians. Of course this can’t be a complete or exhaustive treatment of the subject, but it is a place to start.
Estate planning
After the birth of our first child we did a typical estate planning package with a local attorney, including wills, revocable living trusts, powers of attorney, health care powers of attorney, and advanced directives. It cost about $2000 for the two of us. I consider this an essential investment, although I acknowledge that there are legitimate disagreements about the best ways to accomplish these tasks. Suffice it to say that the estate planning was not only for the benefit of the surviving spouse, but also for the benefit of our young children should the second spouse also die. I sleep much better now knowing that when I die, the executor of my estate will know exactly how best to provide for my children, according to my wishes.
The initial estate planning documents are drafted from the point of view of passing the estate to the surviving spouse. Everything needs to be reconsidered once there is only one person in the estate. It is especially important to consider what is in the best interest of the surviving children. For example, would you really want your 19 year old child to inherit outright their share of a 7-figure estate? Would they make the best decisions with such a windfall? What could possibly go wrong? Thoughtful estate planning can give them staged access to their inheritance, immediately providing for their health care, education and basic needs, without disincentivizing them to apply themselves in their education and career.
Death certificates
You will need to obtain many certified copies of the official death certificate to provide to every party you can imagine: Social Security Administration (SSA), banks, insurance companies, employers, investment houses, etc. They may be obtained from the county office of vital records or possibly from the funeral home. I requested 30 copies and have given away all but 1 copy. Your mileage may vary.
Social Security
One of your first phone calls should be to the SSA (www.ssa.gov/survivorplan/) (800-772-1213) to report the death of your spouse. This cannot be done online. You will need to fill out some paperwork and provide a death certificate and marriage certificate. You are entitled to a modest one-time lump sum death benefit of $255, intended to help with the costs associated with death. Also, your surviving children may be entitled to receive a more substantial monthly payment, based on the spouse’s earnings record, if they are under the age of 18 or possibly older if they are still full time high school students. It is important to request an earnings record for your spouse as well as estimated monthly benefits to which you may be entitled. Reduced survivor benefits can begin as early as your age 60 (or 50 if you are disabled). As a widow/widower you are entitled to 100% of your spousal benefits, in contrast to the 50% limit if both spouses are living.
Note that strategies for maximizing SS retirement benefits are different for survivor benefits as compared with other categories of SS benefits. If you file and suspend your own retirement benefits at your FRA, the survivor’s benefit is also calculated at a reduced rate. Thus, you shouldn’t file and suspend but instead only claim the survivor benefits, and then switch to your own retirement benefit at age 70 if your benefit is higher. If the survivor SS benefits are likely to be higher than your own, then it may make sense to wait until they maximize at your FRA before claiming them. You get no additional increase in benefit by waiting until age 70. If your benefits are likely to be higher than the survivor benefits, then it probably makes sense to start the survivor benefits as early as possible, typically age 60, and let your own retirement benefit maximize at age 70. As with any calculations involving the SSA, it is worth a phone call to make certain that you are making the best decisions.
Just to make things even more complicated, the survivor rules are different again for divorcees, and the benefits also vary with whether or not the divorced decedent had already claimed his/her own retirement benefits and the age at which their claim was filed. Again, one must review with the SSA to be absolutely sure of one’s benefits. Note that you lose access to your survivor SS benefits related to your previous spouse(s) if you remarry before the age of 60, but not if you remarry beyond that age. If you lost your survivor benefits due to remarriage but later become unmarried again, you may reclaim your survivor SS benefits. If you have multiple deceased spouses and are unmarried and over the age of 60, you may select which one gives you the best survivor benefits.
Employer
Also one of the first phone calls, the employer and/or HR need to be notified. Be prepared for some serious shock and grief when discussing the loss of your spouse with his/her boss and coworkers. Don’t forget to discuss with HR, as there may be unanticipated death benefits in the form of life insurance, unpaid vacation and sick leave, payments from a disability insurance policy in effect, accidental death/dismemberment coverage, cancer insurance, etc. Finally, it is likely that your spouse had one or more retirement plans through their employer, and you will need to file appropriate paperwork to claim these accounts. Don’t forget to explore the possibility of a pension. You may be entitled to a death benefit as the surviving spouse and/or a pension buyout.
Previous employers
Was your spouse ever in the military? Did they work for county, state or federal government? There may be forgotten retirement accounts and/or pensions lurking around. More phone calls to make and paperwork to fill out, but the benefits are possibly significant.
Life insurance
Hopefully you have the right amount if you need it. WCI has posted many excellent articles that helped to shape our approach to buying term life insurance. My wife had personal policies as well as group life insurance through her employer. Each insurance carrier will need a certified death certificate. Large insurers typically payout the life insurance contract into a checking account at their own financial institution and encourage you to keep the money there indefinitely, for “your convenience”. This is a great deal for them but a terrible deal for you, as these accounts earn almost no interest. I recommend requesting checks as quickly as possible and writing a single check for the entire amount to deposit into an interest-bearing account. My local credit union offers a 1% money market account. Let’s see, a $1,000,000 payout earning essentially no interest in the insurance company account vs. 1% in a bank account. Why would you leave $10,000 per year on the table?
Banks
You need to notify all banks in which your spouse maintained accounts of his/her death and provide certified death certificates. Joint accounts are not usually a problem. The spouse’s name will be taken off the account and nothing really changes. You can use the same checks, logins, PINs, etc. Individual accounts in the spouse’s name will be closed and the money transferred to an account in your name or a check can be issued. A useful tip is that many banks have bereavement specialists that can walk you through the forms and changes and decisions. USAA even offered a 6 month bump in the interest rate paid on my savings account to 0.5%. My local credit union offered twice as much interest, so the insurance payments were parked there.
Retirement accounts
We had IRAs and employer retirement accounts with both Vanguard and Fidelity as well as with a state employee retirement system. Both companies had excellent bereavement specialists that were assigned to me for as long as it took to transfer accounts and make decisions. There are important choices to make. Do you want to keep your spouse’s retirement accounts as an inherited IRA or do you want to roll it into a new or existing IRA in your name? There are advantages and disadvantages to both approaches, and the bereavement specialists can help. I chose to roll everything into a single IRA in my name to simplify keeping track of my asset allocation and rebalancing. [Editor's Note: This is usually the right decision.]
Financial planning
Once all insurance payments have been received and retirement and investment accounts rolled over and consolidated, you will need to take a step back and look at the big picture. Your goals may have changed. You may have more difficulty concentrating at work. Life may have taken on a different meaning. Time may seem more precious. I know that I drastically revised my own plans for retirement, bumping it up to age 60—just 4.5 years away now, and counting! Don’t be in a hurry to shake things up, but it is important to be thoughtful about revising your estate planning, reviewing your life and disability insurance, and thinking about what you want to accomplish with the rest of your life. In my case, I chose to honor my wife by establishing an endowment in her name at a local school and by contributing to the construction of a bridge at a local park and running trail where she spent countless hours running and enjoying her life. The bridge will have a plaque in her memory.
It is also important to get a handle on your investments and make sure that they are well situated to meet your goals. Is your asset allocation too aggressive or too conservative? Are your resources well positioned to get your children through school and launched as independent adults? Is your income stream adequate to fund your lifestyle with a single salary or in retirement? What if you meet someone else? Could you possibly remarry, and if so, how would that affect your finances? You may find that working with a low-cost, fee-only advisor or financial planner is appropriate.
Professional Organizations
If your deceased spouse was a physician, it is a good idea to notify all professional boards, licensing authorities, professional societies, and even the DEA. Our state board required a certified death certificate. A nice surprise was that I received a prorated refund of her annual dues from the American Board of Family Medicine that amounted to more than $700.
Home
If you and your deceased spouse owned property together, you are entitled to a step up in her/his half of the basis. Thus, it is a good idea to request an appraisal of your home or property with the value reported as of the day of his/her death. My appraisal cost $400 and was a great investment as it protected several hundred thousand dollars from capital gain taxes. You may also decide to pay off any outstanding mortgages or home equity loans. Moving from possibly 2 salaries to 1 salary is a big adjustment, and eliminating monthly mortgage and debt payments is a great step to take.
Taxes
You need to file income taxes as you normally have done for the tax year in which your spouse died, typically Married Filing Jointly. Going forward, you have options and may decide to file as Surviving Widow/Widower for two additional years, offering favorable tax brackets compared to filing as Single. Even though I always have done my own taxes, I decided to work with an accountant for the tax year in which my wife died due to the complexity of settling her estate. Depending on the size of your spouse’s estate and your state tax laws, you may also have to file an estate tax return. Consult an accountant to be sure you do the right thing.
Spousal debts/creditors
As surviving spouse and probably executor of your spouse’s estate, you are responsible for paying any outstanding bills, debts, etc. For couples with merged finances, this should be more or less automatic. If your spouse had significant debt in his or her own name that was acquired before your marriage, you may have other options, including negotiation of debt relief. These issues can be enormously complicated, and I recommend seeking legal advice.
Residual estate
In addition to financial accounts, your spouse may have owned other assets including vehicles, collectibles, jewelry, family heirlooms, and more. I found it helpful to make a detailed inventory with a spreadsheet and photographs. Most items in my wife’s residual estate had more sentimental than monetary value, but this may not always be the case. Consult an appraiser or consignment dealer if you are uncertain. I also found several items of clothing and jewelry that she had exchanged with friends, and it felt good to return these to their original owners.
Electronic access/social media
You may or may not know or have access to your spouse’s login credentials for the SSA, banks, financial houses, employer systems, etc. In any case it is illegal to login using credentials that are not your own, even more so if your spouse is deceased. Don’t do it. Anything you need to know you can request through official channels. It is probably also a good idea to request that the accounts be locked to prevent identity theft or unauthorized access to financial information. It might be a good time to review and upgrade your own passwords and increase login security as well. You may become an unwitting target as news circulates of your loss, with implied increased vulnerability.
Social media is more complicated, and the legal boundaries are perhaps a bit less clear. At the very least I would increase security on your spouse’s Gmail, Amazon, Facebook, Skype, blog, Twitter accounts, etc. You don’t want someone else to hack these accounts, either to obtain information or to communicate in your spouse’s name. One useful tip is that I was able to identify some outstanding bills and discover a previously overlooked retirement account upon review of my wife’s Gmail. We also had a number of community newsletters, communications with local farmers, artisans and vendors coming through her account, so it was helpful to be able to change the mailing address to my own Gmail account. In our marriage we freely comingled all assets and shared access to all media accounts, so we had no secrets. But your case may well be different. Bottom line: Be cautious interfacing with your spouse’s social media, but it may be helpful or even important to gain control of these communication assets.
Unclaimed Property
Worth a search at your state treasurer’s webpage or missingmoney.com. I found several thousand dollars in my wife’s name from refunds, deposits, reimbursements, etc that were never received due to incorrect address information. These are quite simple to claim as a surviving spouse with a certified death certificate and proof of identity. Of course, you can also do this while everyone is alive.
Giving
After the loss of a dear colleague or friend, many people feel moved to honor them with financial contributions to a cause that was meaningful to the deceased. I chose to facilitate these wishes by opening a donor advised fund at Fidelity Charitable. The fund is named in honor of my wife, “The <full name here> Charitable Fund”. Any donor can make gifts any time they want, the value of which is fully deductible for the donor in the year in which the contribution is made. The contributions are invested in mutual funds as I direct. I chose Fidelity Charitable because of its excellent reputation and outstanding investment options, and its expenses are among the lowest I could find. I can select a single recipient or build a portfolio of recipients that will receive funds when I direct the distributions to occur. Note also that this fund serves as an ultimate contingent beneficiary for my estate if both of my children should predecease me. My father-in-law is also directing his estate to contribute to this charitable fund named in honor of his daughter.
The lessons learned in losing my spouse have guided me in my own estate planning. Going forward, as the widowed father of two wonderful kids, I have refined and re-refined my own planning so that they will be well provided for in the event of my demise. All of my accounts and other assets are documented and fully up to date in Quicken, with an encrypted backup stored in the cloud. I have prepared a “master information kit” that details everything my survivors could possibly need to know. All of my passwords are maintained in a cloud-based encrypted password management system, and the executor of my estate has written instructions on how to access the master password. Of course, death is inevitable for us all and is arguably even a blessing at the right time. But an untimely death can derail the bright future of an entire family. Making essential preparations can soften the blow of an untimely death and can provide continued guidance and support for surviving family members even after a loved one is gone.
Has your spouse died? What were the financial issues you found most stressful? How about the spouse of a family member or client? What about a non-spouse partner? What was new to you in this post? Comment below!
Thank you for sharing your story as hard as it may be to recount all this. Something like this never crosses my (our) mind… dealing with death of either one of us. Makes us really want to get an estate plan in place.
Thank you so much for your caring and thoughtful post! Did you have an emergency fund in place at the time, and if so how large? When my husband had a subarachnoid hemorrhage, I cannot stress how important having a year of emergency funding was for us. It bought us precious time to deal with his recovery. It is and was one of our single most important and best investments, despite its “low” monetary return. You and your family will remain in our thoughts and prayers.
Something no one wants to think about but everyone really needs to…
I am by far the majority money maker (90-95%) in our family. My wife is 30. A stay at home mom and part time photographer. I carry 30 year (to age 57), 500K term insurance on her. She has essentially no other pensions/investments except our joint funds.
Question is: Is that enough?
I’ve debated redoing the 30 year on her when she turns 39 which granted is a long way off. I may redo part of my own policy to extend it past age 62 as well. Perhaps a new 30 year policy when I am 39 as well.
I am currently the 100% income producer and was previously the 75% until my wife decided to go part time and then stop working. We have no children. We do not have a life insurance policy on my wife at all. Since she has no income, I do not need to replace her income. Even with kids I can’t imagine needing too much coverage. You may need to hire childcare, but do you really need a half a million or more of life insurance coverage to help with childcare if you have a high income?
Beau, young widows and widowers get remarried. Older widows and widowers find romantic or platonic companions, but dispense with the marriage certificate. How long into the future are you responsible for your wife’s financial status, given that she would likely remarry?
In my opinion, that is not enough. Term life is cheap. If she is a stay at home wife and if you want her taken care of forever if something should happen to you, what would 500k in today’s dollars be worth 10 years from now? 20 years? I have 2 million in term.
I think you and JZ are misreading what he wrote. He has $500k term on his wife and is asking if that is enough coverage for a stay at home mom. He did not say what coverage he has on himself.
I did mis-read that. I was thinking it was coverage on him… so yes 500k on her I would think would be adequate.
Correct. I carry about $1.75 mil or so in combined coverage on myself (worth more dead than alive as I like to say…)
That sounds like a terribly low amount for a doc. You probably need 3-6 times that. Think about what the money would be used for if you died. She could pay off the house and that leaves what….$1-200K? That’s an income of less than $8K a year that life insurance could provide.
Edit: NM: I just realized the $500K is on her, not you. Assuming you have more, that’s probably fine. Sorry!
It should be so cheap now to get it for her if she is healthy, I would definitely increase it sooner than later. Don’t just think about the monetary value of replacing her work at home. Think about paying for kid’s college and paying off your home. If you didn’t have to work to cover those expenses you could work less and have more time for any children you have. You are insuring not just her, but your own time and flexibility choices. At 49 and currently the at home parent, I am looking into a 1 million term on myself to give my husband that ability.
that’s a great idea. I’ll look at the cost of increasing it to 1 million. I hadn’t really thought of using it to pay college and what not.
I had carried 750K term for a long time. It expires this year. We are close but not quite at a self-insured level given our college and post grad funding desires for our three kids. Strangely, the policies I looked at seemed to be priced much better at the 500K and 1M levels than for continuing at 750K. My husband was fine going down to 500K, but for the relatively small premium difference I would rather he had excess than just enough.
I carry 3 million 30 yr policies on us both. It’s expensive, but not as much as I thought it was going to be (which is why I have large polices). I know for certain in either my or my wife’s untimely death, my family will be financially fine-College paid for years down the road, no more having to work, and all debt taken care of. The last thing I want my wife doing if I die is HAVING to work. All physicians who are burnt out by the field or are disenchanted, could you imagine having to return to work to cover the expenses of your spouse (childcare, debt ect)? I strongly, until you are financially independent, recommend term life to cover the future for your family.
We were prompted by our financial advisor when we had another child to ensure we had insurance that went until she’d be past the needs two parents to care for her stage (if one or both working) – sure I worked part time then but without me the family’d need a babysitter, housekeeper, gardener, and chaffeur! So I got a $500K policy to age 14 for her.
Once we were happy with our retirement savings (ie self insured no longer feeling need to replace the salary for widow to survive) we let all the term policies lapse when they jumped in price- only ever had $500K on each other (since both are docs and I’d just work more if I needed more money). As I joke, we wanted to remove the temptation of being worth more to the other dead than alive.
Jenn
This post and likely the next post (assuming it is just as good) should be added to one of the favorite sections or “have a finacial plan” etc…This is great info that we all hope to never need. Sad to hear for the writer, but very interesting to read and know what to expect. Thanks for the great info!
I can not comprehend what you went through. I feel sorry and will keep you, her and your family in my prayers.
I understand what you mean by fairy tale life. For few months we thought we had lost it too as my 5 year old laid in hospital bed paralyzed waist down with no bowel or bladder control. I took three weeks off from work, and would have taken more if needed.
Few questions: Did you see it coming? Was there time to prepare? What about things like internet passwords? How did the kids cope with it.
Answer when you have time.
Thank your for your post. Sorry for your loss. I know how difficult things can be at times. I lost my wife over 4 years ago. She was 42 and our children were 5 and 3 at that time. She had a long history of multiple cancers and we had some warning at the end as she was fighting courageously with a feeding tube and tracheostomy the last six months. Fortunately, we were prepared financially having lived the White Coat Investor principles for as long as I can remember.
I want to add some thoughts that applied to us having young children. My wife was a stay at home mom and I was the sole breadwinner. Being the stay at home mom, I know her job was more difficult than mine even with call and everything. As a single parent essentially right before she passed and after, I spent over $50,000 for a nanny (including nanny taxes) for a year. I wanted to provide the most stable environment for my children. We were fortunate with my salary and our previous financial planning we were able to do that. Even though your spouse may not be earning income, there is a cost to taking care of the children. This can be covered by savings, excess salary, and life insurance. I was able to cover this with my excess salary since we lived well below our means. Adequate term insurance can cover this. You may need to cover this for multiple years and thus I think $500,000 should be the minimum unless you can self-insure.
Amazingly, I had $160,000 of life insurance on my wife. Her parents set up a $10,000 whole life policy when she was a child. I got $50,000 from work without a health exam. I got another $100,000 from a medical association group policy and the question regarding cancer was has she been cancer free for 5 years? Although she had an almost 20 year history of multiple cancers, she was cancer free for 5 years at that time and we were able to get the policy. Because of our financial preparedness, we used this money to pay for funeral expenses which were in the $60,000 range (burial plot, headstone, casket, funeral, etc). Probably could have spent less but wanted it to be nice although funerals are more expensive than you can imagine. We also set up an endowed scholarship for cancer survivors at the university we attended in her name to honor her. She was involved in the creation of it the month before she passed and we funded it after her death. We have been able to award a scholarship annually and my kids loves traveling to the university annually to meet and honor the recipients. It gives us a great chance to remember my wife and let my kids know that she is still helping people even though she is not here. It is so awesome to see how the scholarship has been a huge blessing in the recipient’s lives. Because of our financial preparedness, we were able to do these things.
Another issue to be prepared for financially is time off after the spouse dies. I took two months off because I wanted to help my young children adjust to the loss of their mother. I also needed time to restructure my life to work in night coverage as I am on call 1:4 and couldn’t leave my children alone at night. I was fortunate that I was on paid leave at that time but I was prepared to not have a salary during that time. Make sure you have an emergency fund that can cover 3-6 months of expenses.
Another important thing I want to mention is to make sure you have an estate plan, understand it and know how it works. It is something that should be evaluated every few years to make sure it still does what you want. I have been blessed and have subsequently remarried and we have had two additional children. In our estate plan in place when my wife passed, a large chunk of money went into a bypass trust that will go to my first two children at a much earlier age than we would like at my passing. We don’t want to take away their motivation to work. Not exactly how we would plan it but irrevocable at this point. We have updated our current estate plan to include all four children and have included language to encourage my first two to not touch the bypass trust money until a later age or that will be their only inheritance. Bottom line is make sure you understand and our good with your estate plan. My original estate plan was set up when I was a fellow and If I took the time to understand it better, I would have made some adjustments. At least it encourages me to live a long life because they can’t access the money until I pass away.
Also, make sure your spouse is in the know with the finances. If I were the one to die, my first wife would have had a harder time navigating everything. Since then, I have created an inventory of everything and instructions on how to deal with things so if I am the one that dies, my current wife can easily access all of our assets and take care of our children.
Hopefully, this situation of a spouse is something that will not affect you prematurely as it has affected a few of us. The take home message is with good financial planning, it can make any difficult situation or challenge more bearable, and allow one to focus on the real issues instead of worrying about finances on top of that. Look forward to Part 2 tomorrow. Thanks for sharing.
Thank you for sharing that.
Sorry I am going to miss your talk tomorrow night. I was looking forward to meeting you. I got my wife tickets for a show for one of her favorite comedians tomorrow night for Christmas. The funny thing is last time you were scheduled to be up here last fall, I was scheduled to be out of town and and I seriously was looking into changing my plane ticket to see you then. I was happy to hear it was being rescheduled. Unfortunately, tomorrow night is probably the only night I can’t make it. My wife probably wouldn’t be flattered if I chose the White Coat Investor over her. Hopefully, I will get another chance in the future to meet you. Thanks for your blog.
I’ll be sorry to miss you. Enjoy the show. I’m sure it will be more entertaining than anything I’ve got to say. There shouldn’t be any huge surprises for a regular blog reader!
If you dont mind, how much is the scholarship that you set up? and how do you pay for it?
Fortunately we attended an inexpensive private university where tuition is around $5000/year. They required $50,000 to endow a scholarship in her name. A more expensive university would have required a lot more to endow a scholarship. We have subsequently added to it and it is up to close to $80,000. This is all tax deductible but we have no say in who actually gets the scholarship. We did set the criteria of cancer survivor and GPA of 3.0. We actually funded it with cash but we would have funded it with appreciated securities but at the time with crash of 2008, we didn’t have a lot of highly appreciated securities. If you are interested, I would call the university you plan to do this with and they will be more than happy to help you or answer any of your questions.
I think it would make a great post to describe the process of coming up with a “When I die” document. I have one for my wife (I call it the “Love List”, I think Dave Ramsey calls it his “Legacy File”). It’s in our safe and has details of every account that we have, including login/password info, where all of our mortgage, insurance, etc is with, work benefits stuff, as well as a step by step plan of what to do financially if I croak. I update it about once a year. Obviously it’s something you have to be careful with (would probably be better to keep in safe deposit box or with lawyer).
My wife and I just completed this a few months ago. We also finished our life insurance and are in process of finalizing an estate plan. This one file will be so beneficial if something happens.
My wife and I have regularly scheduled check-ins to discuss our financial goals. Reading this post made me realize how I need to give her a game plan for our investment accounts. While all in index funds or ETFs, its more work than she would want to take on and it would be easy to make it much simpler.
The big question I have though is how to share financial information (and other critical accounts like email) while still being as safe as possible? We use 1Password and only have to remember our master. But what I worry about is if we both died.
What are other people doing in this regard? Information security has never been more important. How do people make a list/update passwords, etc without compromising overall security?
Like you, I keep an encrypted password database in the cloud, but I use a different program—Dashlane. I have provided my loved ones with a link to access my Dashlane database, but not the master password. They know where to look to find the master password in the event of my death. Also, I use Google Drive to provide detailed information to my children, siblings and certain friends who may be called upon to manage my estate. My estate planning Google Drive folder is encrypted and only these people have been given access. I view the folder as fairly secure, but not completely hack proof, so I provide only limited content such as a letters of instruction, notes to certain parties and copies of my estate planning documents. To access my detailed financial records, additional links and login information are required, and my loved ones know how to obtain this information.
Our trust lawyer recommended keeping the documents highly accessible; not in a bank vault shelf. Ours are in a family room cabinet and our adult children know where they are. I will add our marriage certificate to the drawer .
Depending on state laws, a bank box might be sealed upon the owner’s death until a succession can be opened. Leaving a will, trust, etc. inside the sealed bank box can present a real pain-in-the-ass catch 22.
In my state, attorneys typically like to retain the documents themselves.
I really really appreciate this guest post and the ensuing comments. Thank you, All.
This stuff seemed so foreign and for old people one year ago, but it really means a lot to our family now.
Just a couple Social Security questions (future post, WCI!):
1. Everybody really gets $255 at death? That is not tied to income or how much you worked?
2. Am I reading the loss of survivor benefits correctly? A spouse who becomes widowed at, say age 40, will lose all benefits if remarrying before 60? That is very strange.
1. Nor inflation. It’s been stuck there for years and years.
2. I don’t make the rules. I’d suggest Mike Piper’s or Kotlikoff’s SS books. It’s surprisingly complex.
But yes, another “marriage penalty.” Gotta wait until your 60th birthday. https://www.ssa.gov/pubs/EN-05-10084.pdf
Very good post.
Social security benefits are definitely complex and should be addressed with effort and planning. While many physicians may be tempted to dismiss SSA benefits as trivial, it adds up to a lot of money over the length of the payments.
Also the death certificates advice is very pertinent. For an elderly decedent of small wealth who has wrapped up her affairs nicely, you’ll still need about a dozen. For someone of sophistication (e.g. most physicians or physician spouses), especially someone who died in her 50s in the prime of her life, there may be dozens of banks, creditors, brokerages, government departments, insurance companies, etc. that will each require an original certified death certificate. It seems trivial, but it saves an executor a lot of trouble, particularly when the nearest state records office is 50 miles away with limited hours of operation.
The death certificate advice is good. When my father died I had to have one to change his mailing address at the post office!
You said
If the survivor SS benefits are likely to be higher than your own, then it may make sense to wait until they maximize at your FRA before claiming them.
I think this is correct. However, you may claim a benefit (reduced for collecting early) on your own retirement account at age 62. At FRA you may switch to the unreduced survivor benefit.
There is more information here: https://www.ssa.gov/planners/survivors/onyourown5.html#a0=1
If he or she is eligible for retirement benefits on their own record
If your widow, widower or surviving divorced spouse receives benefits on your record, he or she can switch to their own retirement benefit as early as age 62. This assumes he or she is eligible for retirement benefits and his or her retirement rate is higher than their rate as a widow, widower or surviving divorced spouse.
In many cases, a widow or widower can begin receiving one benefit at a reduced rate and then, at full retirement age, switch to the other benefit at an unreduced rate.
Cannot get my wife onboard with our finances as I have done everything from DAY 1
Think I will write it down for the time being and hopefully she will start to enlighten herself
this story shows the importance of having SUFFICIENT term life for the non working spouse
I am the spouse of a physician who was just diagnosed with cancer. We have been doing everything recommended on this blog, but I am extra glad we followed the advice on life insurance and disability insurance. We have 3.5 million in life insurance and an own occ disability in place. It is scary to think about having to use it but we are so glad it is there. Even if my spouse survives I am sure they would be uninsurable or have outrageous rates compared to what we got when they were healthy.
Thanks to everyone for the kind, caring and supportive comments. I will batch some replies to queries listed above.
Dr. Mom: We did have an emergency fund that was somewhat depleted by the time my wife died, due to her illness that lasted over a year. We also had a home equity line of credit with an excellent interest rate and more than enough equity to coast for another couple of years if necessary. Fortunately, we didn’t have to access that credit line, but it gave us a lot of security that short term expenses could be covered.
Dr. Khan: “Did you see it coming? Was there time to prepare?” Her illness lasted more than a year, so yes to both questions, but we were fortunately already prepared, and her death was still a surprise and a shock to everyone.
“What about things like internet passwords?” Hopefully Part 2 answers this question. “How did the kids cope with it.” Thanks for asking about this, as it is the most important issue in my mind. The hardest thing any parent can do is tell their teenage children that their parent has died. Coping with this loss has been difficult for us all, but I am pleased with the progress we have made. One thing we did from the beginning was to talk about our feelings regarding their mom and how her loss has affected us. We talked a lot, and still do! I also insisted that the kids see a grief counselor, which they did off and on for about a year. They insisted that I see one as well, which was helpful. We celebrate happy memories of their mother on holidays, birthdays and the anniversary of her death. Everyone copes in different ways, but in our family we mostly cope by working to make the future a brighter place. Both kids are now premed in college and doing better than I could have hoped for.
To everyone who shared their own losses and challenges, I hold you in my thoughts and prayers and hope that you find peace and serenity and grace in this life.
When my husband had his SAH, our older two kids were a freshman and a sophomore at a large public university. I contacted the university’s Office of Parent and Family Programs to make them aware what was happening in our family and that the kids might have to leave the semester on a moment’s notice. The University was fantastic. Each student was given a 24/7 contact as a point person if needed. They could contact that individual who would coordinate anything needed. They contacted each student’s college within the university. The kids each had teachers stop them after class and offer any help that was needed. It was a great comfort to us, as parents, to know the University had this personal service available.
As a family, we used FaceTime extensively during those first few months. It helped them to see the progress their dad was making and allowed me to read their faces. It helped us feel much more connected despite the distance. Their university is five hours away from home. (They had both ended up at the same University although in different programs.) The experience brought them much closer to each other as well.
Thanks again OP. The same wishes and prayers to you in return.
Dr. Mom, Our son was a sophomore in a large public university and had just finished classes and was entering reading period when his mom died. The Dean of Students’ Office was fantastic, just like you described. They completely supported my son and me in every way imaginable. The biggest challenge was finishing the spring semester exams. Curiously, my son wanted to get them out of the way, as he felt that he couldn’t begin to grieve properly with the distraction of incomplete courses. I had to hold him back a bit and encouraged him to defer exams on his most difficult class, advanced physics, to give him more time to study for his other, easier courses. He felt so much better after finishing the exams. I also think that immersing himself in studying was one way that he coped with this devastating loss. My daughter was a junior in high school, and they were similarly fantastic, allowing her to complete her courses on a flexible schedule and giving her lots of time off for grief counseling and healing activities. I was lucky that both kids were nearby.
Dr Mom,
The more you write, the more I cry.
You are such an awesome parent.
Thank you so much for being a treasure and sharing here along with OP.
No tears on my account please. Use our experiences vicariously to motivate and prepare yourself and your family for both your personal and financial futures. Behavior trumps math. You can learn all the alphabet soup of finance and play all the math games, but in the end, it is what you do/did that matters. I find accounts like RL’s and OP’s to be very motivating because of how touching they are personally.
Thanks again to the OP and to WCI for posting. WCI, I think this post is an example of when your site is at its best.
Best wishes to all.
I agree it would be wonderful if I had more posts from regular readers like this one.
My mother died when I was a 4th year med student. After reading these posts I realize that Universities have come a long way towards helping students with grief. I don’t think grief counseling even existed in the 80s. I was lucky to be doing electives that did not matter.