How to be Prepared when Your Spouse or Life Partner Passes Away

No matter if it is a long illness or a sudden accident that takes away your partner, the survivor will face emotional and daily living struggles.  Children, siblings will all be there to comfort and help, but the best help may be what is done to plan for the day it eventually happens.  What can be carefully done to protect the survivor to ease the problems they will face later?

Step 1: Have a will.  It doesn’t have to be complicated.  It isn’t just for people with lots of money or assets.  It is for everyone, to ease the legal burden of transfer of assets and ease of access to money and property after the loss.

Step 2:  Make smart educated choices about any company pension you may have.  Some people choose to take a lump sum.  This is because they feel that if they invest the money they will make more than if they take a monthly payment for the rest of their life.  Another choice is a lifetime monthly income.  This pays the retiree a monthly payment for the remainder of their life.  If however they die before their partner, the partner stops receiving any more payments.  Another choice is a “joint and survivor payment” which means that the survivor will continue to receive a monthly check after the pension participant has passed away.  It may be the wisest for most, but often not understood properly.

Step 3: Avoid choosing a ‘pension maximation’ plan.  This suggests taking the largest single payment option available and investing all the extra money to buy some insurance.  When the retiree whose pension was invested into insurance dies, the survivor gets the insurance.  Often the cost of the insurance is high, because of their age and health risk, and uses up a large part of their disposable income so their lifestyle suffers and the insurance payment later does not provide enough revenue anyway.

Step 4: Delay retiring and collecting Social Security as long as possible.  The longer you work, the more you will get every month from Social Security.  If you are healthy, wait.  There will be many years of retirement in your future if you are healthy.

Step 5:  Take out life insurance when you are young and healthy to keep the costs down. Have long term care insurance to avoid costly bills later.

Step 6:  Keep your health care proxy, will, insurance documents, power of attorney in one place. 

Comments (1)

carmen357 said:

	... It is very sad to lose someone but great tips!
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March 19, 2011
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