Navigating Finances After the Loss of a Loved One

Speaker 1 – 00:00
One of life’s biggest challenges, the loss of a loved one. And during this, the financial stress and the decision
fatigue that you can experience can be very tough to navigate. I know we’ve helped many clients, unfortunately, you
know, navigate the loss of a loved one. If the surviving spouse was like, I’m not sure what we have where it is, we
can reverse audit and look at bank statements to look at, okay, where were payments going? And so how do we
clean up the chaos and turn it into a system that works for them for the rest of their lives? Maybe you’re gonna be
too emotional to process stuff and do something in five years, but our take is education and empowerment so you
can make the proper decision. Once ready, just rebuild the financial plan.
Speaker 1 – 00:45
If you’re a young family, like, it’s not ever too early to think about this. If you’re married with kids, it becomes
essential.
Speaker 2 – 00:51
I think the easy starting point, but I’d say immediate action items is foreign.
Speaker 1 – 01:04
Loved one is going to put your world upside down. And during this, the financial stress and the decision fatigue
that you can experience can be very tough to navigate. So this podcast episode is meant to help you navigate the
unknowns, especially if your spouse or partner or loved one was the one handling the finances, to help you
essentially lower your decision fatigue and give you a guideline of what needs to be accomplished right away
versus, you know, what should wait for a couple months as far as any big financial decisions go. Well, Chris, I know
we’ve. We’ve helped many clients, unfortunately, you know, navigate the. The loss of a loved one. A lot. A lot of the
cases, the person that passed was the main financial person in the relationship. Like, they were the ones.
Speaker 1 – 01:48
So I’m going to go through, you know, really, two examples of what to do. You know, what is it? What does it look
like if things were set up in advance? And the reason for this is if sometimes the. The loss of a loved one, it’s not a
sudden thing, it’s a sickness, you know, for example, a cancer that’s drawn out and you. Unfortunately, sometimes
the probabilities are against your favor. So it’s kind of lining up things to make sure that the surviving spouse will
be okay. And then some of our clients have become a client after the death of. We. We did not work with either
spouse before, and they’ve come to us after the fact that. And, you know, sometimes things are very unorganized.
Speaker 1 – 02:25
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
1 / 11
And so how do we clean up the chaos and turn it into a system that works for them? For the rest of their lives. So
let’s talk about first about how to set up in advance. Like if we know in advance what is a simple checklist of things
that we’re looking to accomplish to make sure the transition is easy for the non financial partner.
Speaker 2 – 02:46
Yeah, I think the simplest one and it should be obvious, but again we’ve seen instances where accounts are
everywhere. So I think just having a clean personal financial statement, just a simple balance sheet like where’s the
money at now just so you have your bearings versus trying to call 10 different 800 numbers because you have old
statements from 10, 15 years ago that you’re digging up. And so I think just having a clear snapshot of here’s
what’s in place, here’s where it’s held, Fidelity, Vanguard, whatever and just simple balance info.
Speaker 1 – 03:18
To further that point, I, I would be looking at if we had like a couple months in advance and they had the appetite to
do this, we’d look to consolidate all assets to one custodian in advance. If you do this in advance, you need both
spouse signatures fit joint accounts and then you’re dealing with one custodian after. So you’re not dealing with 10
different companies. And if you wait till after, you know, you need to prove, you need to have a death certificate for
every single company. And that can be very emotional in itself. If you ever get everything into one custodian. And
you make sure the titling is either in joint name or there’s direct beneficiaries because sometimes people uncover
they have an ex spouse or they’ve, you know, someone that wasn’t intended. And it doesn’t matter what your will
says.
Speaker 1 – 04:03
If you have a direct beneficiary in something, the money has to legally go to that person, even if it’s an ex spouse or
someone that you didn’t intend to go to. So we would do an audit of their entire balance sheet, we do a
consolidation of their entire balance sheet and then we would do a detailed audit of titling and beneficiaries. If you
have the titling and the beneficiaries correct, you can avoid probate altogether and keep the court system out of
your estate. And if you have other physical assets, you can set up a, you know, even a revocable trust could be, you
know, let’s say the spouse wants some of the money or their kids if they’re on a second marriage and some of the
spouse, some of the kids are provocable.
Speaker 1 – 04:38
Trust can help, you know, Navigate the wishes of the person that’s passing unfortunately and make sure all that the
goals are reached after.
Speaker 2 – 04:46
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
2 / 11
Sure.
Speaker 1 – 04:46
So yeah, then I would make sure to go through and make sure that the non finance spouse. I don’t know how else
to better put that. We have a, you know, we do a budget, we make sure the taxes are getting, you know, are filed.
We look at any opportunity where they have a married filing jointly tax return. I believe they get it that year. So if the
spouse pass in June, they still get a file as married filing jointly that year and then is it head of household the next
year? I know we just looked at this for a recent client.
Speaker 2 – 05:15
Qualifying widow.
Speaker 1 – 05:17
Qualifying widow, yeah. Which is a similar tax structure. Yeah.
Speaker 2 – 05:21
A little bit more friendly than the single to that point. I don’t know if you want to get into this now. There’s also. If
you don’t intend on staying in your house, there’s a special rule for the gain on a property. So say you bought your
house back in the 80s or something and it’s appreciated significantly. If you’re filing a joint return, there’s a bigger
Runway that you can exclude from the gain on a sale than single. But that extends out for two calendar years, two
tax years. So you can still get that higher exclusion. It’s I believe 550 versus 2 or 500 versus 250.
Speaker 1 – 05:58
Yeah. So if you’re, that’s a really important point. If you bought a house for half a million, you’re selling it for a
million. You have that two years after. If you’re like, you know, I don’t need this much house. If it just me, my kids
are gone, my spouse just passed all half million dollars of tax reverse. If you wait two years in one day, you only get
250 of that tax free of the 250 gets taxed. If you’re at a, you know, 23.8% capital gain rate plus a 3% state tax and
that’s, you know, 60 some thousand dollars of money you’re handing over to the IRS. There are some decisions
from a tax perspective. You have to look at the timing, what tax bracket you’re in, your primary home. It can make
sense to make some decisions.
Speaker 1 – 06:37
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
3 / 11
You’re going to have time, you don’t need to make the decision that month, but you’re going to have, you know,
some guidelines of timelines that are going to make a lot of sense tax wise for you to do. And you should really be
sometimes maybe you’re going to be too emotional to make that in two years. It’s more important to process stuff
and do something in five years. But our take is education and empowerment. So you can make the proper
decision. Okay, what else will we do in advance? I would, I would think like, you know, if the one spouse is passing
a large qualified account, because like you said, the next year they get the qualifying widow the year after that to go
to a single tax filing status.
Speaker 1 – 07:14
And so let’s say one spouse passes, you know, $3 million traditional IRA or a 401k that’s pre tax, and they’re on 75
and the required distribution has started. They now that single person now has half the tax bracket to work
through. So they’re gonna hit 10, 12, 22, 24, then 32. And so what was coming out at under the 24% or lower
bracket where they were married is now coming out. A large portion of it’s now coming out at 32, hypothetically.
And so their tax bracket has jumped 8% on that excess. Their Medicare, the IRMAA charges have jumped up
because now that’s the single. The, the brackets get cut in half. So there’s some significant widow penalty as far as
the IRMAA charges go, the tax filing status, how RMDs are treated.
Speaker 1 – 08:00
So they want to consider some Roth conversions the year that the spouse is still alive. So it’s married filing jointly
the year at of death and then the year after death. We want to fill up certain brackets in preparation.
Speaker 2 – 08:13
Yeah.
Speaker 1 – 08:14
Anything else you can think of in the advanced scenario?
Speaker 2 – 08:17
No. Aside from like how you said checking account titling, just getting, if you completed an estate plan, making
sure that’s all current too. But that’s pretty much the only other thing I could think of.
Speaker 1 – 08:30
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
4 / 11
So let’s talk about if someone had just met us after. Nothing was planned for in advance. We’re planning from
scratch now it’s a widow, unfortunately. What are some of the basic steps that we need to take and what should be
acted on immediately? And what would you say? Let’s take three to 12 months in some cases before we make any
big decisions.
Speaker 2 – 08:53
Yeah, I think the easy starting point is just looking at the last joint tax return because that’s going to show the full
picture. It’s going to have all the, like the paper trail of where, like if you had a brokerage account at some random
custodian, it’s going to get a 1099 that would be, you know, so.
Speaker 1 – 09:08
That can kind of show like a forensic audit.
Speaker 2 – 09:10
Yeah. Right. So here’s where Everything was being reported from.
Speaker 1 – 09:14
They might, she may, she or he may not even know.
Speaker 2 – 09:18
Yeah.
Speaker 1 – 09:19
What was there if it was, especially if it was a sudden, if it was a heart attack or it was an unexpected thing. The
surviving spouse may not know. What you have, what they have together. So that’s a good starting point for sure.
Yeah.
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
5 / 11
Speaker 2 – 09:32
There’s even websites that you can search through the state, like if there’s unclaimed property, that’s not really
going to be an immediate. That’s more so if years go by. Yeah, there is a database that you can kind of search for
accounts that have been lost by the wayside. But I’d say immediate action items is review the return, see where
things were coming from and then start to build that sheet of like, here’s where everything’s at and here’s where we
want to get it to.
Speaker 1 – 09:56
Sometimes there’s been life insurance policies that are paid up that you don’t know about. So those websites can
beneficial sometimes if the client’s receiving annuity payment. A lot of times, like we had a client that came to us
at a MetLife policy, we’re like, well, they may have other policies. So we called with the client in the line, found out
they had a life insurance policy and that was a paid up policy. But you know, these insurance companies aren’t
necessarily going to volunteer. They’re going to find out and stop the payments. If they find out the death, they’re
not going to necessarily volunteer. There’s actually lawsuits years ago on that. But we need to make sure we track
down any insurance policy. Do the tax audit. We would do a bank account audit.
Speaker 1 – 10:34
If the surviving spouse was like literally came in and acted like clueless. We would. As far as like guys, my spouse
did all the finances. I’m not sure what we have where it is. We can reverse audit and look at bank statements to
look at. Okay, where were payments going? MetLife or a Prudential had an insurance payment going to it. Then we
know we call them over the taxes. We can see any reportable. If they’re taking distributions out of an IRA, we can
find it that way. It’d be 1099r. If there’s brokerage accounts, we would know that from a 1099 forms on the tax
return.
Speaker 1 – 11:07
So and then as far as like other things, we work with Social Security to notify because the, if they were married for
10 years or longer, let’s say the spouse that passed was getting 3,000amonth from Social Security and The spouse
is getting 2,000amonth. Well, you can go claim and stop the two and get the three. So you don’t get both anymore,
but you get the higher of the two. So just little things like that would want to make sure on the checklist. And
basically we’re going to need account statements, we’re going to need death certificates and you know, a copy of
your will and estate planning documents. And then we’ll be able to. Tackle this stuff very efficiently.
Speaker 2 – 11:46
Yeah.
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
6 / 11
Speaker 1 – 11:47
Anything else that you’d say?
Speaker 2 – 11:49
No, no, that’s it. I think the big thing is just getting your, getting our arms wrapped around like what’s in place right
now and starting to clean, you know, get things back to a manageable spot.
Speaker 1 – 11:58
Yeah. And then I would say once ready. So this may be three months, this may be six months, this may be 12
months for some. The surviving spouse. We want to redo their estate plan. Yeah, right. So we’d want to look at.
Okay, who are your benefit, where do you want your money if something happens to you?
Speaker 2 – 12:13
Yeah.
Speaker 1 – 12:15
Kids, if it’s a second marriage, you know, maybe some of the money went to a trust, they’re taken care of. So now
you’re worried about your biological kids. There’s all these considerations. We want to redo your estate plan. Will
power, attorneys. Who’s going to make the decisions for you if you become incapacitated. Healthcare, financial
durable. We want to most likely have a revocable trust if you’re a super high net worth, probably an irrevocable
trust if some of the money’s not already in there. Yeah. Once you’re ready, just go through the estate planning
process and I would say the next logical step. So initially we’re going to want to make sure right off the get go we’ll
do a quick budget like what are your monthly needs, get assets consolidated, make sure that we’re, we have a tax
efficient distribution strategy.
Speaker 1 – 12:51
But then we’d recommend after the after at this point, once ready, just rebuild the financial plan. Yeah. So what
does that look like? So walk us through, you know how we would do that.
Speaker 2 – 13:00
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
7 / 11
Yeah. So we, you know, just take it back to square one. Like what? We always want to assign a job description for
the portfolio and that I’m sure the needs are going to change. So we want to go through first step a new budget.
What’s your cash flow need? And then reverse engineer the rest of the plan around what we’re trying to achieve
from a. Whether it’s a monthly income standpoint or annual Expenses, whatever it is, as those needs change due
to the new circumstance, we want to make sure that the portfolio does too.
Speaker 1 – 13:31
No question. And sometimes we’ve seen there’ll be a drastic philosophy difference, like maybe the. Let’s pick on
the husbands for a second. The husband. Because females typically live longer than males anyway. So I don’t
know the percentage wise. I want to say like 80% of our clients that are widows are females.
Speaker 2 – 13:47
Right.
Speaker 1 – 13:47
Because they live, they typically live longer. So typically the husbands were like the cheap ones, like convincing
their, the, the spouse. Like we can only spend, you know, 10,000amonth between our Social Security portfolio and
the way they could spend like 15. So sometimes we see the surviving spouse will drastically change. They’re like,
you know what? We funded our kids college. Right. I want to start enjoying this. Cause I wasn’t really, you know, he
handled the money before. So we’ll help educate them. Like what’s the artwork of? Like, okay, you still have some
legacy goals. You want to stay financially secure. We don’t know how long you’re going to live, but we can also
ratchet up your lifestyle. Yeah.
Speaker 1 – 14:28
And so I mean, I’m thinking of like three examples in my head where we’ve seen after a loss, after 12 months, we’ve
essentially doubled the lifestyle of.
Speaker 2 – 14:38
From before. I, you mentioned something about the estate plan that I wanted to go back to.
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
8 / 11
Speaker 1 – 14:42
Yeah.
Speaker 2 – 14:43
So there was one instance where this was, we started working with somebody after their husband passed. And it’s
relevant in the higher net worth, you know, planning space. But portability wasn’t elected on the deceased, you
know, whenever they closed their estate.
Speaker 1 – 15:01
Yeah.
Speaker 2 – 15:02
So that was something that the surviving spouse is set to be over the estate limits. And if you go over those limits,
it’s very severe. It’s. That means that your estate is high enough right now. The limits, what, 14 million?
Speaker 1 – 15:17
15. 15 million rounded. Yep.
Speaker 2 – 15:19
So if you’re a single person and your gross estate’s 20 million and that exemption’s 15, that means you’re 5 million
over, there’s a flat 40% estate tax that’s applied. And so that estate exemption of 15, it’s for both spouses. But if
you don’t elect that when closing out the decedent’s estate, that 15 goes away. So the single.
Speaker 1 – 15:42
Give a timeframe, you can go back and grab it though.
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
9 / 11
Speaker 2 – 15:44
Yeah. So in this instance went back retroactively. I can check while we’re talking here to see if there’s a timeline. I
think you can Open the estate and get it.
Speaker 1 – 15:53
There’s definitely a deadline.
Speaker 2 – 15:54
I’m sure there probably. Yeah. But that allowed us to go and grab another 15 million of a credit. Now that number
could change as tax code changes, but now you gotta double the exemption. Yeah. So now if we freeze it, if she’s
expected to pass with 20 million before she had an exemption of 15, she would be 5 million over. Now she has 30
where she’s safe. So that’s huge. Like if that’s missed, it could literally be millions of taxes that go. Yeah, you know,
go out the door.
Speaker 1 – 16:20
Absolutely. But yep, no question. Well, I would say, you know, one other key thing. If you’re a younger family and
you’ve seen this happened, unfortunately parents or grandparents, you know, we hear very good examples of like
they had their ducks in a row, Gram and grandpa had everything. It was planned. You know, there was a legacy
plan. It was a pleasant surprise and it was so easy. And we’ve seen the opposite of nightwear where it’s like
basically it’s someone’s full time job to have their parents estate closed out. It takes right. 12 months to do it
because of all the business interests and real estate and all these titling. You have to look at postnups or prenups
and everything was just kind of chaotic. Yeah. So if you’re a young family, like it’s not ever too early to think about
this.
Speaker 1 – 17:04
If you’re married, let alone if you’re married with kids, it becomes essential. So just you know, asking the question,
like if something happens to me and I’m the breadwinner, if I’m like, you know, a financial contributor, which even if
you’re a stay at home spouse, like you’re still a huge financial contributor because the cost of daycare or child
support is huge. And so just making sure like can. Will my family still be able to live a similar lifestyle?
Speaker 1 – 17:24
Not like a better situation, but like a similar lifestyle if I pass and do we have the structure of estate planning
Meeting Title: EWA B3 Episode 3 Finances After
Loss WIP4.mp4
Meeting created at: 9th Dec, 2025 – 8:04 AM
10 / 11
documents set up to make sure that’s able to happen smoothly and there’s no creditors, predators, you know, the
family can continue the daily temperature and the financial temperature on a rhythm while navigating, you know,
one of life’s biggest challenges, which is a life of a possible. The loved one.
Speaker 2 – 17:52
Yeah, for sure. Anybody good? It’s good to have your estate plan in order, but definitely if you have kids, a business,
if you have properties in multiple states, like those are all like you need to have an estate plan for this. If not that
somebody’s going to go through the probate process and it’s going to make that loss way worse. Now, you have
attorneys, you have court. Like, you have so many different people involved that, like, that could have all been
avoided.
Speaker 1 – 18:14
Absolutely. Well, thanks for joining us, Chris. And we’ll catch everyone next week.