How to change your estate planning after your spouse dies

No one lives forever, but death is not the most pleasant subject to think about, so it can be all too easy to put it off. Estate planningwhich puts you at risk of dying without a will or instructions for your final affairs. But even if you are one of the 1 in 3 Americans who have a will, your work is not done. It is important to review your documents regularly and update your estate planning to reflect your current circumstances.

This is especially important if a spouse has died. But the death of a spouse can be complicated. These tips will help you tackle the task step by step when the worst happens.

Estate Planning and Couples

If you are married, you probably created your estate planning jointly with your spouse. You formulated your wishes assuming the other party would outlive you. However, the death of a spouse requires you to step back in. But as Gil Baumgarten, founder and president of Wealth Management Segmentpoints out that it is important to include contingencies such as the death of a spouse when preparing your initial planning documents.

“I would go a step further and make some assumptions about who is likely to die first,” he said. “Men tend to have a shorter life expectancy, and health problems of both spouses are often known and can help with assumptions. This can contribute to more advantageous planning.”

4 steps to change your estate planning

The death of a spouse leaves you with a long list of things to do while you grieve. It can be difficult to know exactly what to tackle first. Experts recommend focusing on these steps:

1. Update your powers of attorney

Your estate planning documents may include a power of attorney. This appoints someone to manage your financial affairs and/or medical decisions in the event that you become unable to do so. In most cases, this power of attorney is given to a spouse. Donna Stefans, Esq, AIF at Donna Stefans Law Groupbelieves your first step to changing your estate planning should be updating your power of attorney.

“I believe that powers of attorney should be updated first as a surviving spouse because the person who is usually chosen first is the spouse and we now have to ask other people to help us in times of need,” Stefans said.

2. Review your will or trust

After the death of a spouse, another important step is to review your will or trust. Dana Blue, Esq., an attorney at Dana Blue Lawsaid it is critical to update who receives the money left in your bank accounts, life insurance and retirement plans.

“If you forget to update who gets your money, it may end up going to someone you didn't want,” Blue said. “This can cause arguments and delays. If you're unable to do this, quickly switch to someone you trust to make decisions for you. This will keep things running smoothly.”

3. Visit the beneficiaries again

If you have life insurance and retirement savings accounts, you have a beneficiary named. After the death of a spouse, it is important to review each account with a beneficiary to make sure it is up to date. But as David T. DuFault, Principal, Attorney at Sodoma Lawpoints out that this step may not be as urgent as other steps.

“As in estate planning documents, assets with beneficiary designations often (and preferably) include primary and contingent beneficiaries,” advises DuFault. “Unless there has been a catastrophic event, the contingent beneficiaries are often still in existence and would inherit if the primary beneficiary passes away.”

4. Consider setting up a trust

Lindsay Graves, senior law attorney and founding partner at Graves Law Firmbelieves long-term care planning is essential after the death of a spouse. Many of us will need long-term care at some point, she said. The cost of care is about $100,000 a year.

“From an estate planning perspective, the biggest change that occurs when a spouse dies is that the surviving spouse is now legally considered single,” she said. “All states have their own laws about how much of a person's assets can be protected while they are eligible for Medicaid, but in almost all states, that amount is drastically lower for a single person. For these reasons, a surviving spouse must take steps to protect their assets. Often, that means considering adding a trust to the estate planning process to exempt some of the assets that would otherwise be subject to consumption.”

The death of a spouse tends to put life on hold for a while. But while you are taking care of all the arrangements, it is important to take a little time to End-of-life planning documentsYou may need to meet with your attorney to make changes to your estate planning, but it will be worth it to know that your loved ones will be taken care of when you are gone.

Stephanie Faris is a professional financial writer with over ten years of experience. Her work has been published on a number of leading financial sites, including Money Under 30, GoBankingRates, Retirable, Sapling, and Sifter.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, giveaways, and more. The Inc. 5000 ranked The Penny Hoarder the fastest-growing privately held media company in the U.S. in 2017.