Financial Planning After the Death of a Spouse

By Jackie Heater, Director of Client Relations

This article is part of a series of reflections about wealth planning written by Jackie Heater after her husband passed away. You can read the first article here and the second article here.

It’s been almost two years since my husband, Bob, passed away unexpectedly. As I’ve written in my previous blogs, when you lose a spouse or significant other there are a lot of things you have to navigate while dealing with the grief.

No matter how old you are, there are times you don’t feel like “adulting,” as they say, especially during times of grief. But as an adult, we know we have to press on. Here are things to consider in the immediate aftermath and years after the loss of a spouse.

Minimum Standard Deduction – First Year

As the surviving spouse, you can file jointly in the tax year your spouse passed away, which means a larger standardized deduction. Even though it may seem overwhelming, it’s a good time to meet with your financial advisor to determine if there are things you can do that will benefit you for that final joint return and managing taxes as you move forward. For example, while you can take advantage of that larger deduction, it could make sense to take some additional distributions from your IRA accounts to boost your emergency fund or pay off debt.

It could also make sense to do a Roth conversion.

If you are a person that makes charitable donations to your church or other 501(c)(3) charities and you are 70½, it could make sense to use your required minimum distributions (RMDs) to make those donations with qualified charitable distributions (QCDs).

Financial planning after your spouse dies is unique in that first year and extremely emotional, so meeting with your advisor can help you identify blind spots.

Minimum Standard Deduction – Second Year

When that second year rolls around and suddenly you are filing in the single tax bracket, there is going to be some sticker shock. This was my first year filing in the single tax bracket. Not only had I lost my husband, the grandson I’d had legal custody of was now over 18 and no longer a dependent.

If you had any assets that had to go through probate – the legal process that sometimes occurs to settle an estate after someone dies – this is the year you are likely to have to deal with that part of the estate as well. This can be complicated and will likely increase your tax liability. Mike and I had discussed it, and I knew what to expect, but it doesn’t mean it wasn’t a shock.

Since I’m still working, my CPA recommended updating my W-4 to single and possibly withholding an additional amount each pay period in addition to increasing pre-tax contributions to my retirement plan to help reduce my taxable income and reduce that large tax burden with tax time rolls around again. If you are still working that’s something you should discuss with your financial advisor and tax preparer.

Financial Basics after Losing a Family Member

In that second year, you are still grieving but are starting to find your footing. While things are a little more clear, there still may be some loose ends to tie up.

Beneficiary updates – Make sure you’ve updated your beneficiary, or beneficiaries, on all of your accounts. This list could include IRAs, 401(k), transfer on death accounts, annuities, life insurance and others. This can help your family avoid probate on the assets in these accounts.

Estate planning – Estate planning is not one-and-done. Review your trust, wills, durable powers of attorney and other documents to be sure they are current and accurately reflect how you want your estate affairs handled. If you don’t have any estate plan, it’s time to establish one.

Beneficiary Deed – If you don’t have a trust, file a beneficiary deed for your home and other real estate holdings, adding a transfer on death beneficiary(s), again so your family can avoid probate.

Tax Planning – Tax planning is more than filing your tax return. Tax laws are constantly changing, and working with professionals who understand those laws will help you make the most efficient decisions given the new tax bracket you now find yourself in. Our CPA at Gertsema Wealth Advisors can give you ideas and collaborate with your tax preparer to avoid some of that sticker shock.

Selling your Home/New Home Purchase, Improvements or Refinance – Now that the fog has cleared a bit, you may decide you need to upgrade your home or downsize. With financial planning, we can show you the effect these options will have on your long-term financial plan and help you determine the right path for you.

Roth Conversions, RMDs, QCDs – Financial and tax planning with our team can help you determine if it’s right for your situation.

When You Have to Redesign Your Life

I’ve been in this business for over 30 years and have worked with many clients, helping them through the paperwork and decisions they have to make after a loss. Grief is a process, and everyone has to find their own way through it.

Gertsema Wealth Advisors has invested in top-notch technology and personnel to guide you through the tough decisions. It’s not just about investing but advising, educating and informing, so you can make the best decisions for your future and for your family. When you find yourself having to redesign your life, that’s pretty important.

Get in touch to set up a complimentary initial consultation.


Converting from a traditional IRA to a Roth IRA is a taxable event.

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