Many surviving spouses have been financially blindsided due to poor planning. The following steps will ensure your spouse is taken care of upon your death:
Update wills: Never assume that if you die, everything automatically passes to your spouse. While any jointly owned property is theirs, they’re only entitled to up to half of your individual assets unless you specify otherwise in your will.
Review beneficiaries on retirement and other accounts: Many assets, including joint savings and checking accounts; 401(k) and individual retirement plans; and stocks, bonds, and brokerage accounts, require a beneficiary for disbursement. If you were married before, make sure your ex-spouse isn’t still listed, as beneficiary designations typically trump wills.
Make jointly owned debt a priority: While your spouse isn’t required to pay any debt owed in your name only, he/she is still liable for jointly owned bills, which could prove financially crippling. Consider paying down your jointly owned debt first.
Make sure there’s enough: Will your spouse have enough to survive once you’re gone? Age, work opportunities, individual debt, and future retirement are all important factors to consider. If you come up short, consider obtaining a new life insurance policy or even saving more.
Identity theft: Leave a note reminding your spouse to report your death in writing to the three main credit-reporting bureaus. He/she should also request a copy of your credit report so he/she is aware of all your open accounts. This prevents identity thieves from extending your credit line, making purchases, and opening new accounts, which could have devastating ramifications for your surviving spouse.