When a senior passes away, there are frequently questions about the type of benefits from Social Security that are available to her husband (especially when the wife’s benefit was larger than his).
Along with this, questions arise about the protective measures to take to protect her identity from being stolen and other legal measures that are needed after the death of a spouse.
nj.com’s recent article, “A to-do list for widows, and how to protect the identity of a dead loved one,” says that when a loved one dies, there’s a lot you can do to protect their identity.
As to the widower’s Social Security benefits, he’s entitled to the greater of his benefit or her benefit, whichever is higher. It’s good reason to plan your Social Security benefits for when you retire.
While some say it doesn't matter if a deceased person's identity is stolen, it can be an issue. There are several things you should do when someone dies.
First, the executor should contact Social Security and inform the agency of the wife’s death. Next, contact the three credit bureaus to also tell them, and ask that they put a freeze on her credit. To do this (and most of the other actions here), the executor will need copies of the death certificate and letters testamentary to wrap up the finances. The executor should then inform the wife’s attorney and/or tax preparer, as well as all her investment custodians and financial institutions.
If she had a non-qualified (non-retirement) account, there should be a step-up in basis on at least 50% of the account and possibly 100%, depending on the circumstances. In either case, the executor should obtain the fair market value of each of the investments as to the date of death right away. This should be immediately mentioned to both the accountant and the attorney. Make certain that the investment custodians increase the cost basis, as needed. If there’s an IRA, there are options, and for a spouse, the account can be treated as a rollover IRA or an inherited IRA. Note that an inherited IRA requires minimum distributions annually but doesn’t impose a 10% penalty on withdrawals.
Another step is to look at any life insurance policies. If the deceased had a will and trust, the executor should talk to an estate planning attorney to understand where the assets are going. Taxes should be estimated to determine if any changes need to be made to withholding or estimated tax payments.
Last, the surviving spouse/beneficiary should sign proper forms for all brokerage accounts and new account forms to indicate the new ownership and title.
Reference: nj.com (November 6, 2018) “A to-do list for widows, and how to protect the identity of a dead loved one”