On a scale from one to Anna Nicole Smith, how bad are we searching for an elderly sugar daddy this year? 😍🤠 Of course, we’ll only marry for love…the love of money. 🤑
A recent WSJ write up dove into some of the most common financial surprises families face when members pass away, especially spouses. Let’s get into the highlights. 🔦
Here’s Five Fast Facts on loved ones passing and finances:
- 🛍️ Sticker Shock - If a late spouse was the main person responsible for financial management, the rest of the family could be in the dark about how much things actually cost. To keep up, expenses may get cut and retirees could have to go back to work.
- 🧑🏫 History Lesson - Another result of one person managing all the finances: many elderly widows don’t have their own credit history. While this wasn’t a big deal when both spouses were alive, the surviving party could now have a tough time getting a mortgage or new credit card.
- 💰 Tax Attack - In what’s often called the widow’s penalty, a spouse could get thrown into a higher tax bracket after the other passes. This typically happens when there’s required minimum distributions on retirement accounts or survivorship pensions.
- 📑 Trust Me - If a family doesn’t have revocable trusts or joint ownership of accounts set up, plan on playing a waiting game to get assets transferred. Without those structures, assets owned solely by someone who passed have to go through the probate court process, which could take over a year.
- 💳 Extra Credit - Sometimes late family members leave a little surprise credit card debt behind. Fortunately, many creditors write off small debts, and if the card wasn’t in anyone else’s name, they’re likely off the hook. However, if you live in a community property state, you could have to foot the bill.
🔥Bottom line: In most of these scenarios, a little planning can nip these issues in the bud before a family member passes. Tap a financial advisor for help getting affairs in order ahead of time. In case you didn’t hear, we’re smack in the middle of a gigantic wealth transfer. Is your family ready to pass the baton, no dropsies? Head over to this article for some wise words.
Did you experience any financial shocks when a loved one passed?
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