You should review and/or update your estate plan whenever any significant changes happen in your life. As you reassess your finances and build a budget for your next chapter of life, it’s important to look at your estate plan and figure out what needs to change and what doesn’t.
How Soon Should You Update Your Estate Plan After Your Spouse Passes Away?
A lot of financial planners say you shouldn’t make any big decisions for at least a year after your spouse passes, and we agree—to a certain extent. Some decisions just can’t wait, but this isn’t one of them.
This is one of those things that doesn’t necessarily need to be done right away, but you should try to get to it within the first year after your spouse passes. There are some items such as tax deadlines to be aware of.
One way to make sure it gets done is to schedule an appointment with your estate planning attorney far in advance. Pick a date several months away so you have time to process your grief while still keeping yourself accountable to handle this important matter.
How to Reassess Your Estate Plan After the Death of Your Spouse
There are multiple places in your estate plan that will likely need to be updated after your spouse passes, beginning with your beneficiaries.
Your spouse’s name is probably mentioned multiple times in your estate plan—whether it’s in your will or elsewhere.
Update anywhere that your spouse was named as a beneficiary. Even if your will has a built-in backup plan stating who your assets should go to if your spouse has passed away, now is the time to go in and remove their name from your will and make sure everything is as neat and updated as it needs to be.
The last thing you want to leave your loved ones with is the potential of confusion and red tape getting in the way when executing your estate.
In addition to updating your will, other areas you may need to update include:
Power of Attorney
To be clear, we’re talking about your power of attorney here. If you gave your spouse power of attorney, it needs to be updated to someone else.
Other options for power of attorney include your children, a sibling or a close friend. Consult your estate planning attorney when making a decision.
Your attorney may caution you against naming children, depending on your relationship with them. If you think there could be problems, you may want to name at least two of them as joint powers of attorney so they have to work together rather than having one make all the decisions alone. Not only can this minimize problems, it can help reduce the burden a single child may feel.
Your siblings may or may not be the best choice depending on the status of their health and how old they are. For instance, if you name your older brother, chances are he could end up passing away before you.
The thing to keep in mind when choosing a power of attorney is who you can trust to follow your wishes—even if they disagree with them—and who can you change it to so you won’t have to change it again if they pass away.
Healthcare Power of Attorney
The same goes for healthcare power of attorney—often more so. Your healthcare power of attorney is the one who will make medical decisions for you in the event that you are unable to do so.
If you suspect that one of your children or a sibling might not execute your wishes, then look elsewhere. How you want to be treated in such an event should be entirely up to you.
This one often falls under the healthcare power of attorney. A HIPAA (Health Insurance Portability and Accountability Act) Authorization form is a way to let someone else share/release your private medical information to be viewed by others. If you have such a form, chances are your spouse is on it, so it’s important to update.
Schedule of Assets
A schedule of assets is a list of your assets required by courts when executing your estate. After the passing of your spouse, you will likely need to update the listing for life insurance and any others that directly refer to your spouse. In addition, if you sell any real estate, vehicles or other items, you will want to update the schedule on those as well.
Digital estate planning is a relative newcomer to the world of estate planning, but it is becoming more and more important every day.
Digital assets may include:
- Social media accounts
- Email accounts
- Benefits programs (frequent flyer, card perks, etc.)
- Cell phone apps
- Online bank accounts
- Online subscriptions
- Chatroom accounts
- Non-fungible tokens (a.k.a., NFTs)
- Any other information stored on a computer or “in the cloud”
Some of these assets may have more financial value than others. For instance, if you don’t have the login to your spouse’s Facebook page, you can still request that their page be either deleted or turned into a memorial page by submitting a few documents.
On the other hand, if your spouse happens to own any Dogecoin or other cryptocurrency and you don’t know the password, you are pretty much out of luck—just ask the guy with $225 million sitting in bitcoin that he can’t access because he doesn’t remember the password.
If you can still plan ahead, keep a central repository of all logins for you and your spouse so neither one of you is left scrambling to close accounts and cancel subscriptions. Consider keeping everything in a password manager like LastPass or 1Password.
Bills, Credit Cards, etc.
Most likely, you have both your name and your spouse’s on all your bills and credit cards. This is something you can wait to do, but it’s important to make sure you remove your spouse’s name off your bills after he/she passes.
If your spouse is listed as primary contact, it may be hard for you to get the account changed if you move. It’s always good to get the paper copies of bills paid and make sure you are the main contact.
Your estate is your legacy, so it is important that you keep it up to date with all the latest information. Contact your estate planning attorney today to schedule your appointment, whether you’re planning to meet with them tomorrow or next year.
Need help making sense of your financial situation after the passing of your spouse? Click here to download our ebook: “The Next Chapter: A Financial Guide After Losing Your Spouse”