survivor planning

8/3/2019 Survivor Planning

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By George F. McClure

SURVIVOR PLANNINGWhat Every Spouse Should Know


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The inormation provided in this e-book is provided or general inormation and does not constitute

legal advice. Individuals should consult qualied estate planners and/or attornies when making wills

or estate plans or administering an estate.

Published by IEEE-USA.

Copyright 2008 by the IEEE. All rights reserved. Printed in the U.S.A.Edited by Georgia C. Stelluto, IEEE-USA Publishing Manager

Cover design and layout by Gregory O. Hill, IEEE-USA Electronic Communications Manager

This IEEE-USA publication is made possible through unding provided by a special dues assessment o IEEE

members residing in the United States.

Copying this material in any form is not permitted without prior written approval from the IEEE.


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Table of Contents

What Your Loved Ones Should Know ..............................................................................................................................4

Advance Planning Getting a Saety Deposit Box ...................................................................................................4

Retirement Benets ................................................................................................................................................................4

A Word about Wills, Living Trusts and Finances............................................................................................................5

Put Together a Checklist: ......................................................................................................................................................5

In the Event o ......................................................................................................................................................................8

Aterward ...................................................................................................................................................................................9


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4

What Your Loved Ones Should Know

We all exist in a blizzard o paper bills, receipts, invoices, bank statements, tax returns and pay-

ments, mortgages and coupon books, insurance policies, property deeds and automobile titles, bills

o sale, and registrations. The challenge is keeping everything organized, so that i we are not around

to perorm needed transactions, someone else could make sense o our aairs and do what needs to

be done. In amilies with two bread-winners, both partners need to have their aairs organized, sodetails are easily accessible to the other one. I there were a dual catastrophe, where both spouses

died, then the records organized would be invaluable to whoever has to assume control.

For many o us, our rst introduction to this organizing eort is in helping our aging parents with

their aairs. I you have this task, it can be helpul as a rehearsal or what will occur with a loss in your

own amily. The outlines here can be used as a checklist or either situation.

I you are or will be a personal representative, administrator, or executor or a relatives estate, you

have another incentive to pull the necessary materials together.

This task can be easy to put o, but dont procrastinate the sooner you collect and organize the

materials you need, the easier it will be to track the aairs or your spouse or partner, or other rela-

tives you are helping.Computer spreadsheets can be a great help, especially with bank accounts and or tracking maturity

dates or certicates o deposit.

Advance Plan ning Getti ng a Safety Deposit Box

Advance planning is useul or the here and now. You should have a sae deposit box or your own

valuable papers. Put original records in the box. Documents might include birth certicates, mar-

riage and divorce certicates, military discharge papers and passports. You might want to include

investment certicates, such as stocks, bonds, government securities and passbooks. File records o

your prot-sharing and pension plans, and IRAs, and other things o documents o this nature. Putthe certicates o title to your cars in the box. Include copies o wills and death certicates. You might

also consider putting valuable jewelry or collections in the box. Include the location o the box key in

your inormation list. I you are helping a relative, inormation about and access to their sae deposit

box would be very helpul.

Retirement Benefits

You and/or loved ones may be eligible or retirement benets rom employers. These benets can be

an essential part o yours, or your loved ones uture nancial security. It is important or you and your

spouse to understand how your plans work and what benets you will receive. Just as you would

keep track o money that you put in a bank or other nancial institution, it is in your best interest to

keep track o your retirement benets. A good overview o this sector is ound at www.dol.gov/ebsa/

publications/wyskapr.html.


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A Word about Wills , L iving Trusts and Finances

I you dont have a will, getting one should be a priority. I all property is held jointly with a spouse, transer

is automatic, but i there are children rom a previous marriage, you need a will to be sure the distribution

is as you would wish. A will drated by an attorney is preerable to do-it-yoursel wills. A revocable (living)

trust can be helpul i your aairs are complex, or i you own property individually. Property held in a trust

need not be submitted to a probate court upon death o the owner, saving delays and ees. A will still oper-ates in connection with a trust. I you own property in more than one state, and/or there could be conusion

as to the location o your legal domicile, consult an attorney.

Some preliminary steps include reviewing nances. Is insurance coverage on the principal breadwinner

adequate or the survivors in the event o a death? Term lie insurance can be helpul to assure that children

are cared or, and that a home mortgage can be paid o in the event o death o the wage earner. IEEE has

attractive rates or term lie insurance; it also oers long-term care insurance not just or members but

or their parents and in-laws as well.

As noted below, preparing a amily budget or now, or retirement, and or a surviving spouse is a useul

exercise, allowing the two o you to work together on getting your aairs in order and assuring an adequate

cash ow or sustaining the survivor. There are mortality tables in IRS Publication 590, Individual RetirementArrangements (IRAs); while these tables are intended or use in making mandatory IRA distributions, they

can also give an indication o expected lie spans. O course, these data should be modied i longevity runs

in the amily. There should be a plan or covering immediate expenses ater death. Bank accounts in the

name o the deceased (only) may be rozen. What savings account should be used? What securities should

one consider cashing in, i needed? How will the costs o the uneral be paid?

Put Together a Checklist :

Gather nancial details.1. Computer spreadsheets are useul or compiling data, and can be updated eas-

ily as events (or transactions) dictate.

Income tax return leA. lers copies o past returns, or at least seven years. A useul reerence is the

300-page IRS Publication 17, Your Federal Income Tax, updated annually and available ree at your

local IRS ofce or call 1-800-829-3676. A PDF version is available online, with over 800 links, at www.

irs.gov/pub/irs-pdf/p17.pdf.

Financial account dataB. or brokerage accounts, stocks and bonds

Social Security card and account number as well as Medicare cardC. (i Medicare eligibility has been

established)

Location o property deeds, abstracts, titles or other ownership documentsD. or automobiles,

RVs, boats, private aircrat or other big ticket items, registrations. I an application or an exemption

providing reduced property tax assessment has been issued, it should be kept with valuable papers.Checking/savings accountsE. including certicates o deposit (CDs) ace amounts, account num-

bers, names on accounts, maturities

Savings bondsF. (i any) ace amounts, dates, series, location

Credit card leG. or active cards, benets (which can include accidental death insurance) and other

details, e.g., persons authorized to use the cards, limits, passwords, 800 numbers, etc.


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Bills on auto-debit payH. rom checking accounts or credit cards (i any)

Location o owned or group insurance policiesI. (health, lie, disability, property, casualty); contact

inormation; be sure beneciaries are current

MortgagesJ. amounts, payments, payees, due dates, servicing agency contact inormation; include

any home equity loans, too. Conrm the pre-payment terms or mortgages that will be paid o with

insurance proceeds. Most have no pre-payment penalties, but i you have one with a penalty, con-

tact the lender to inquire about removing it.

Servicing agentK. (or home ofce) contact inormation or pensions, annuities; le should include

annuity contracts, terms, and payment schedules. For pensions, include the terms or survivor pay-

ments, i joint and survivor terms have been selected (e.g., 50 percent payments continue to widow/

widower ater the pensioner is deceased).

Cost data or securitiesL. when acquired, number o shares, cost basis (including commissions).

While there is currently a step-up in basis to current value or property held at death, so that there is

no taxable gain that could change in the uture. I the person with your power o attorney needs to

sell securities beore your death to pay or your care, there can be a taxable gain and the cost basis

will be needed.

I you plan or certain personal property to be distributed to designated recipients ater yourM.

death, a list (or codicil to your will) including property descriptions and recipients should be provid-

ed or your executor or administrator. This inormation can also be added to the data spreadsheet.

Consult a nancial advisor to point the way or planning your nancial afairs2. (IEEE members have

access to one oering discounted wills, trusts, ree advice, other services through the IEEE Financial Ad-

vantage Program go to www.ieee.org/fap).

Prepare a will, or a living (revocable) trust to include will and health care surrogate designation3. ; a

health care surrogate or health care proxy makes decisions or you, i you are incapacitated. This desig-

nation avoids the need or a court-appointment (and attendant delay) to carry out nancial transactions

and make decisions or you. Make sure copies reach your attorney, executor, and sae deposit box, in ad-

dition to yourselves. Making and executing the trust document is not sufcient; you then have to retitle

your assets to put them in the trust. Buying another car or a new boat? Put it in your trust.

Have (or execute) a durable power o attorney4. , permitting a spouse or other trusted riend to act or

you, and, separately, another one empowering you to act or them.

A living will describes the extent to which you want heroic intervention to save you,5. i you have

a major health incident where the prognosis is that you cannot ully recover. Some people want to be

kept alive, even i it takes a ventilator or other machinery, while some do not. Spelling out your wishes

and providing copies or your amily and physicians is a prudent step. At www.uslivingwillregistry.com/

forms.shtm, you can download a orm appropriate or your state.

Budgets or present, uture (retirement), and the survivor6. the budgeting process will likely suraceother items you may have overlooked.

Location o key documents7. : birth certicates, passports, marriage certicates, Medicare card(s), military

discharge certicate (DD-214), i applicable. (www.archives.gov/veterans/military-service-records/

dd-214.html) A complete manual o benets or veterans and their dependents is ound at www1.

va.gov/opa/vadocs/fedben.pdf.


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I a death occurs beore age 658. , when Medicare becomes available, what plans should be made or

health care insurance or the survivors? Is there a survivor health plan through the employer? Should

the surviving spouse expect to nd work to have benets coverage? Are private medical plans an option

(about 18 million Americans have private health coverage)? Should a Health Savings Account be consid-

ered in connection with insurance?

Retirement plan inormation9. ; include contact inormation or administrators (including telephone

numbers, Web sites, passwords i needed)Locate employers Summary Plan Descriptions or vested pension plansA.

Latest reports o retirement benet estimatesB.

Social Securityi.

Employer-sponsored vested plans:ii.

Dened benet retirement plansa.

Dened contribution plan participation (401(k), 403(b), 457, Thrit Savings Plan)b.

List social, proessional and raternal groups where membership is held10. . Include notations about

lie memberships, and any death benets rom raternal groups, e.g., American Legion, Elks, Masons,

Moose, Odd Fellows, VFW. For lie memberships, include contact inormation to stop service. The noti-

cation list can even include casual associations, such as school alumni e-mail groups.

Make nal plans11.

Investigate low-cost servicesA. uneral and memorial societies negotiate group rates or members;

see directory at www.funerals.org/directry.htm

Prepare obituaryB. ; have recent digital photo available, i desired or the obituary. Provide instructions

on where the obituary should be published. Plan to update this le every ve years.

Leave instructions or your personal preerencesC. cremation, organ donation? Burial plot or

vault? Prepaid arrangements? With whom?

Make up a spreadsheet with the pertinent inormation, and keep copies with home les and in12.

sae deposit box. Describe this le in your written notes or survivors. (Determine whether your

state is one that reezes access to a sae deposit box upon death o a single owner or co-owner.)

I burial o a military veteran will be in a private cemetery13. and a government headstone or marker

will be requested or the veterans grave, the Veterans Administration suggests that the amily complete,

in advance, VA Form 40-1330, Application or Standard Government Headstone or Marker or Installation

in a Private or State Veterans Cemetery, and place it with the veterans military discharge papers or use

at the time o need.


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In the Event of

Death o a loved one triggers a series o actions. Check records o last wishes or details on desired organ

donations and handling o remains

Notications:

Physician (or death certicate, cause o death)1.

Funeral society or uneral director (was there a prepaid plan, cemetery plot?); can provide copies o the2.

death certication (needed or urther nancial transactions and lie insurance claims)

Church (may include memorial service arrangements)3.

I employed, Human Relations ofce or employer activate group lie insurance payments, other ben-4.

ets

Newspaper(s) placement o obituary (separate rom uneral notice placed by the uneral director)5.

Social Security Administration at6. www.ssa.gov/pubs/10008.html (the uneral director may take care o

this notication)

Payers o pensions and/or annuities7.

Financial service providers (brokers, mutual unds) where accounts are maintained8.

Banks and/or credit unions where accounts are maintained9.

Insurance companies with policies on the lie o the deceased10.

Some bank and credit union accounts include a death insurance benet; they will require notica-A.

tion, too.

I death was accidental, in connection with travel charged to a credit card, there may be an accidentaB.

death benet; check with the credit card issuer; this benet should be conrmed periodically, as they

may change over time.

Mortgage insurance issuer (i any)11.Automobile or other vehicle insurers; at the least, the miles driven will be less or a survivor than or a12.

couple that could reduce the premiums.

I a military veteran, the Veterans Administration (qualied or ree headstone)13. www.cem.va.gov or

any other burial benets or veterans (drawing retired pay), plans are required beore death. www.cem.

va.gov/cem/bbene_burial.asp

Designated executor, administrator or personal representative to settle the estate14.

Proessional, social, raternal, other organizations where membership was held. May also send brie15.

obituary, i the deceased was active in the organization.

Actions:Retitle vehicles to remove the deceaseds name.1.

Notiy credit card companies; cancel any cards solely in the name o the deceased.2.

Arrange to shit name or pay o any installment loans or vehicles; i an auto lease was in the name o the3.

deceased, contact the dealer about transerring the balance o the lease to the survivor, or terminating

the lease, i the vehicle will no longer be required.


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Shit IRAs, securities, other assets in the name o the deceased to the designated beneciary. Have cop-4.

ies o the death certicate available to accomplish these actions. The Form 8606 in income tax returns

should be used to show the ater-tax portion o IRAs, which will change year by year when Minimum

Required Distributions have started (ater age 70-1/2).

Income taxes i a couple had been ling a joint return, the survivor can still le a joint return or the5.

year o the spouses death and claim both exemptions. A widow(er) who remarries during the year can-

not take an exemption or the deceased spouse For more inormation on ling a decedents nal taxreturn, see IRS Publication 559, Survivors, Executors, and Administrators. www.irs.gov/pub/irs-pdf/p559.

pdf

Afterward

I you have completed the tasks above that apply to your situation, congratulations! You can sleep easier.

But you still have to revisit the les periodically to make sure everything is current. I you acquire a new

credit card, or example, it should be added to the credit card le. I a mortgage is paid o, a Satisaction o

Mortgage should be recorded at the Courthouse.

Dont leave your amily in the dark, digging to nd important documents and inormation. Lie has to go onater the a spouse, partner or parent passes away. Dealing with the myriad o decision processes immedi-

ately ollowing a death in the amily is a conusing ordeal to say the least. And we seldom have the time or

oresight to talk about all the decisions that have to be made rom the major issues, such as the will and

estate, down to the everyday matters, such as paying bills and doing maintenance on the car. Paying atten-

tion to these details now may not lessen their grie, but it will help your spouse avoid some anxiety, stress

and rustration when you are gone.


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