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According to Statista, there are 3.7 million widowed men and 11.5 million widowed women in the United States. The United States Census Bureau shows that widowhood is much more common among older individuals, perhaps for obvious reasons. Few couples in Ohio die at exactly the same time, which means that every spouse has a relatively high chance of experiencing widowhood at some point in their life. Although grief can be paralyzing, widows and widowers should quickly consider their estate planning after this life event. Various adjustments may be necessary, and an experienced estate planning lawyer in Ohio might be able to help in this regard.
While some estate planning steps may occur gradually after the loss of a spouse, others may be more urgent. Excessive delays could cause financial losses, tax issues, and additional estate planning challenges for other family members.
One of the most discussed estate planning topics today is the sunsetting of the federal estate tax exemption. First created in 2017 under the Tax Cuts and Jobs Act, this tax exemption may allow widows and widowers to keep more of the family wealth and avoid federal estate taxes. This could be a particularly important priority for high-net-worth families, as the federal tax exemption is now well over $13 million. Thanks to a “portability provision,” a widow may claim the portion of the exemption that was left unused by their deceased spouse. However, widows and widowers must act quickly to take advantage of this tax exemption. If they do not reserve their exemption by filing IRS Form 706 within nine months of the death, they may lose it.
Spouses may need to file life insurance claims after losing their loved ones. The value of these life insurance policies could be significant, and spouses may need to act quickly. Generally speaking, widows and widowers should file these claims as quickly as possible – ideally within a month of the death. Paperwork can be challenging for those preoccupied with grief, and spouses may wish to seek assistance alongside experienced estate planning attorneys for prompt, effective action.
Certain widows and widowers may be entitled to various “survivor benefits” according to government programs. The obvious example is Social Security. If the deceased spouse was eligible for these benefits, they may pass to the widow after their death. The same general logic applies to many other federal programs, including Veterans Administration (VA). In addition, there may be other State or career-specific survivorship benefits to consider. For example, the State Teachers Retirement System of Ohio (STRSOH) provides survivorship benefits to the widows of certain teachers. Widows and widowers may wish to discuss potential survivorship benefits alongside Rhodium Law, LLC.
Once widows and widowers address their most urgent concerns, they may wish to consider various assets in the family estate. Jointly owned property should be a priority, and widows might need to change titles to reflect their sole ownership of the assets. This may apply to real estate, vehicles, bank accounts, investment portfolios, and many other assets. Although title changes might seem tedious, they are necessary for many reasons. The transfer of complete ownership to the surviving spouse may not occur automatically. Widows and widowers should make it clear that they are the only remaining owners of jointly held property, and this will limit confusion regarding future estate planning processes.
Often, the simple act of locating assets can be challenging after the death of a spouse. This is particularly common when one spouse played a leadership role regarding finances. A less financially knowledgeable widow may not be aware of complex corporate structures, offshore accounts, non-traditional investments, and other assets held by the deceased spouse. Forensic accountants and other financial professionals may assist when not only locating these assets, but also understanding how they work.
Another important step after the death of a spouse involves updating beneficiaries. In many marriages, spouses list each other as primary beneficiaries. When one spouse dies, the surviving widow or widower may need to select a new beneficiary. Widows should take this step as quickly as possible, as the future is completely unpredictable. Even young widows and widowers may need to quickly select new beneficiaries – including children, siblings, or other family members.
If widows and widowers fail to update their estate plans before they also pass away, the family may face stressful and complex probate issues. Perhaps the most obvious issue is intestate succession, which forces families to receive assets according to a pre-set formula. There is no way of controlling this process, and beneficiaries may inherit assets in a way that goes against the wishes of the family.
Although widowhood is particularly common among older individuals, young spouses may also lose their loved ones. This may present additional challenges, particularly when it comes to minor children. New widows and widowers may need to select guardians for their children by updating their Will. With only one parent remaining, it is important to consider what might happen if the widow also passes away.
In addition, widows and widowers may wish to consider steps to preserve family wealth until the children reach adulthood. Trusts may help accomplish this goal, and it may be necessary to put some of the family wealth into an education fund. These decisions may be especially challenging in blended families, as the remaining widow may be biologically unrelated to some or all of their surviving children.
The most appropriate estate plans meet the unique needs of each individual. While widows and widowers may have distinct priorities when it comes to estate planning, widowhood affects people in different ways. One widow might want to leave wealth to children, while a childless widow may select siblings as beneficiaries. While it is often challenging to address these unique concerns through online research alone, widows and widowers may be able to discuss their situations in more detail alongside estate planning attorneys in Ohio. To continue this conversation, consider calling Rhodium Law, LLC at (216) 699-8145.
