Review your will and make adjustments to reflect your new situation. You'll probably need to change who will inherit your assets and you may need to decide on a new executor. Change accounts and jointly held property into your name including credit cards, deeds, etc. You do not need to go through the process of applying for new, individual credit card accounts.
The death of a spouse can be devastating. Sudden losses can be even harder.
If your spouse managed the majority of the financial responsibilities, even just
paying bills can seem overwhelming. But you can work your way through it. It is
manageable.
Try not to make any long-term decisions right away. Take your time. Emotional
times are not the best times to make decisions.
Gathering the proper paperwork is the first step in settling your spouse's
affairs. Start with the following:
If you receive a life insurance benefit, save that money. Put it in an
interest-bearing account such as a savings account or money market fund. But
keep it liquid. You may need it.
Make sure you have health insurance. Call your spouse's company to see if you're
still covered and for how long. If you're not, get medical insurance right away.
Use the paperwork you gathered to claim the following:
This is just a brief introduction to some of the tax issues facing you. Taxes
can be quite complicated and you should consult a professional tax advisor for
more help.
Within nine months, you are required to file an estate tax return if the assets
of the estate exceed the threshold for taxability. Your spouse's estate will not
be subject to estate taxes if its net worth is less than the current exclusion
amount for the year of death. That threshold will rise each year until the
complete repeal of the estate tax in 2010. Taxes, which can be as high as 50
percent, must be paid on any amount above the threshold amount. You also are
required to file annual income tax returns reporting any income earned by the
estate.
The Unlimited Marital Deduction allows you to avoid estate tax completely if
your spouse has left everything to you in his or her will and you are a U.S.
citizen.
You must file a final federal and state income tax return for your spouse on
income earned that year up to the date of death. As with your return, this is
due by April 15th. You can file a joint return as long as you do not remarry
prior to the end of the year he or she died. If you have a child still at home,
you can use the joint tax rates to figure your income taxes for two additional
years.