Making the transition from being married to grieving a spouse is hard enough. Planning ahead can help the surviving spouse avoid legal and financial challenges as they navigate their new lives, says a recent article, “Five Financial Blind Spots That Burden Grieving Spouses,” from The Wall Street Journal. Beck, Lenox & Stolzer Estate Planning and Elder Law, LLC, hopes you get a lot out of how to protect a surviving spouse from financial burdens.
Surviving spouses are often surprised to learn their spouse had individual credit cards with debts. The widow should contact the creditor and tell them the person has died. In many cases, it’s less costly for the creditor to write off smaller debts than pursue them through the formal probate process. In many states, if only one name appears on the card, the survivor is not obligated to pay it. However, in community property states, the surviving spouse may be liable for debts incurred during the marriage, even if they are not on the card.
Assets owned solely by the decedent must go through probate before they can be transferred to a surviving spouse. In some instances, this can take more than a year, leaving the spouse unable to access funds to pay bills. To avoid having to borrow money to pay expenses while the estate is being settled, a few steps can be taken:
- Assets should be placed into trusts, which can be prepared to give the survivor access to funds.
- If assets are owned jointly, property will automatically transfer to the survivor.
- TOD/POD designations (Transfer on Death, Payable on Death) can be added to bank and investment accounts to ensure a smooth transition without going through probate.
- Each spouse should keep enough money in separate accounts to cover several months of expenses.
For spouses who have never worked outside the home, it can be a surprise to learn they have little or no credit history. If one spouse handled all the finances, the survivor may be invisible to credit bureaus, even if there are large household assets. Credit systems track individual borrowing rather than household wealth, so a spouse with no credit history may find it difficult to refinance a mortgage or qualify for a credit card on their own. Both partners should maintain active credit in their own names to prevent this.
Addressing the new costs of a single household is often a shock to surviving spouses. If only one spouse handled all financial matters, the other may not know how much their lifestyle costs. To avoid being blindsided by fiscal realities, both members of the couple should be involved in managing household finances. Monthly meetings to discuss finances will go a long way toward preventing a rude awakening.
Taxes are another surprise for surviving spouses. Not only does the household lose a second Social Security benefit, but people with survivorship pensions and Required Minimum Distributions from IRAs and other retirement accounts may find themselves pushed into a higher tax bracket, even as their income decreases. A survivor can usually file as “married filing jointly” for the year the spouse has died, and if there are minor children, the widowed partner may qualify as a “qualifying surviving spouse” for up to two years following the year of death.
Part of the couple’s conversation with an estate planning attorney should address the financial future of the surviving spouse. Planning, discussing budgets and preparing for a shift in taxes are all part of helping spouses through one of life’s toughest events. We hope you will take advantage of our free initial phone consultation and speak with one of our attorneys about planning for this inevitability. It will bring you great peace of mind and ease the worries of your spouse and your children.
Reference: The Wall Street Journal (Jan. 3, 2026) “Five Financial Blind Spots That Burden Grieving Spouses”
