When your spouse passes away, you will have to collect legal documents, uncover and calculate your spouse’s personal debts, and determine which of your joint financial obligations now belong to you. However overwhelming it may seem, the following steps can help you gain control over your finances and protect your credit score.
Obtain Legal Documents
After your spouse passes away, you can obtain the death certificate through a doctor or coroner. Once you have the death certificate, you can begin gathering estate planning documents such as the will or a trust. These documents outline who should act as the executor of your spouse’s estate. The duty of the executor is to take care of the decedent’s estate, pay taxes, disburse assets to beneficiaries, and manage and pay debts. If there is no will, the surviving spouse can go to probate court to determine if an administrator needs to be appointed to manage the estate.
Close the Credit File
Your spouse’s credit file will not close automatically. You must contact the three big credit agencies–Experian, Equifax, and TransUnion–and ask them to close the decedent’s credit file. You can make the request in writing and be sure to supply a notarized copy of the death certificate and executor paperwork. To ensure the letter arrives at the credit bureaus, it is wise to send it via certified mail. You can then request a copy of the credit report if you are the executor of the estate.
Calculate Your Debt
The credit report, in addition to bank statements, will help you figure out if you will be responsible for any outstanding loans. Close out any zero balance credit cards and transfer or refinance jointly owned debts into your name as appropriate. Different lenders may have different policies on deceased account holders, so contact each one to find out how to move forward.
Check Life/Disability Coverage on Loans
Any loans covered by life/disability insurance may be paid off completely, reducing what needs to be settled in the estate. If you were co-signer on loans with your spouse, you will be able to contact the financial institutions to see if each loan had coverage. For any loans that were in the decedent’s name alone, you can contact the financial institution to check on coverage if you are the executor.
If your spouse received Social Security or veteran’s benefits, or was scheduled to receive them soon, you may be able to receive those benefits. You can contact the Social Security Administration and/or the U.S. Department of Veterans Affairs to find out if you are eligible to receive your deceased spouse’s benefits. You may also be listed as beneficiary on other accounts, such as pensions or 401(k) retirement plans. It is a good idea to check with your financial planner and/or tax advisor to determine how to incorporate the funds into your current plan and what impact the funds will have on your annual income tax return.
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