Estate Considerations for Widows and Widowers

November 05, 2021

By Karen L. Goldberg

The emotional toll of losing a spouse is devastating, but it can also be financially overwhelming if the surviving spouse has never handled the couple’s finances. The survivor may not have an understanding of the magnitude of the couple’s wealth and whether there are sufficient funds available to support his/her lifestyle. In addition, he/she may be overwhelmed by the estate administration involved with the spouse’s estate and confused about when certain trusts created under the spouse’s will are to be set up and how much access he/she will have to the trust funds.

The couple’s professional advisors (e.g., financial advisor, accountant, estate attorney) can assist the surviving spouse with all the above. The survivor’s concerns about having enough can be put to rest by providing an analysis of his/her projected annual income, net worth and inheritance, as compared to his/her annual cash requirements. The survivor’s anxiety with respect to the estate administration can be assuaged by simply educating him/her as to how the estate administration process works, and how and when trusts under the will of her spouse will be funded. 

Unfortunately, the survivor may not have a relationship with the couple’s advisors nor understand the importance of astute tax and financial advisors. Because of this, the survivor is often surprised by the cost of such professional services and hesitant to incur them. This can be challenging when trying to assist the survivor.

To ensure that a widowed spouse is not financially overwhelmed, both spouses should be familiar with the couple’s finances as well as with their advisors.  If this doesn’t happen before one spouse passes away, the survivor should enlist the assistance of his/her current advisors since he/she has the most familiarity with the couple’s finances and tax planning. 

While these may be uncomfortable matters to address with your loved ones, doing so can help ensure the couple’s comfort level down the road. However, if you do end up in an unfortunate situation and are seeking guidance, matters can typically be best addressed in a client meeting that includes the legal, tax and financial advisors for both parties of the estate. Within this meeting parties will review the tax implications of funding these trusts as well as the financial strategy that should be implemented by each of the trusts. After such a meeting, a client’s anxiety with respect to the process typically dissipates.

About Karen L. Goldberg

Karen L. Goldberg Partner-in-Charge, Trusts and Estates practice, within the Personal Wealth Advisors Group. She specializes in estate planning for closely held business owners, senior corporate executives and other high net worth individuals.