Financial Issues of Death of a Spouse or Partner

In most marriages, one spouse handles the long-term investments, while the other handles the daily money. Long-term inventments can include retirement accounts, such as 401Ks, IRAs, and pension plans, mutual funds, college funds, and stock funds. Daily money includes the household bills, healthcare bills, grocery shopping, and entertainment money.

While this is a generalization--in many families one person handles both long-term investments and daily money--it is important to consider what happens if one parter were to die suddenly.

If a spouse manages the daily money but not the long-term investments, there are some crucial pieces of information to know, such as:

1. How to contact the deceased spouse's former employer to activate pension accounts, or to transfer pension distribution. If, for instance, you and your spouse are in your 40s and your spouse dies, you need to start the paperwork process so that you learn when you can access your spouse's pension. If your spouse was already receiving a pension, contacting the pension center at the company or union is also important, to change the name on the distribution checks, or to see whether your benefits change.

2. How to access 401k and IRA funds. If your spouse's 401K fund is through his or her employer, there are often websites with passwords that can be accessed--but only if you know the password. Be sure to learn these details from your spouse, or have a file with the passwords in them, should an emergency arise.

3. Where to find other investments. Do you own mutual funds? Have a stock brokerage account? A college IRA for your children? Series I or EE savings bonds? Be sureyou know where these items are, or how to access them.

4. What your spouses social security number is. On all tax forms, social security numbers are required for tax filing. Once a spouse dies, contact the Social Security Administration with your deceased spouse's social security number to begin benefits distribution. If you have minor children, be sure to have their social security numbers as well; minor children receive separate benefits from surviving spouses.

If the spouse who manages the daily money were to die suddenly, how would the surviving spouse manage? With only one spouse supporting the family, keeping a good credit rating is crucial, so staying on top of bills becomes a priority, even as you are grieving the loss of a partner. Be certain that you:

1. Know what all the bills are. Electric, gas, healthcare, credit cards--know all the accounts, and know where your partner keeps files of current balances and current bills.

2. Are able to pay the bills from an account of your own. In some states, all joint accounts are closed when someone dies. How will you pay the bills if you cannot access your money? Keeping a separate account with some money in it is wise for this reason alone.

3. Contact any student loan agencies. Student loans do NOT need to be repayed if the person holding the student loan dies. For more information, go t: http://studentaid.ed.gov/students/publications/repaying_loans/2003_2004/english/loan-discharge-cancellation.htm

Dividing financial chores makes great sense in a household, but each partner needs to know enough about the other partner's financial role to be functional in the case of sudden death or severe disability. Have a frank, open discussion with your partner and make a plan for such emergencies.