Trucking & Taxes – August/September 2022

It will come as no surprise to anyone that the death of a spouse is considered one of the most stressful life events a person will face. Yes, death is part of life, but even when expected it still causes stress and even more so when unexpected. Hearts are broken as we grieve for our spouse, and our lives are seriously disrupted in many ways. That is why being prepared in life for estate planning is so important to your loved ones.

If you don’t have a will, get one today.

A spouse’s death evokes many different emotions – shock, sadness, despair, anger and denial. Stress also increases significantly if the spouse who dies is the one who typically manages the budget, the bills and all finances for the household.

So give yourself a little time to adjust before you start managing the financial end of things. Taking this time to face your loss can help you as you work to adapt to the new way of your life. We have all seen that the adjustment period may be brief or last many years. However, it’s important to surround yourself with people you trust – family, friends, support groups and professionals – who can offer support and advice in your best interest.

Even if you’ve always handled your family’s finances, the number of financial and legal matters that must be settled in the weeks and months following your loved one’s death can be overwhelming.

Here are some important financial issues that will need to be dealt with in the short term.

Let’s start with your spouse’s will and estate planning documents: insurance policies, bank and investment account statements, stocks and bonds certificates, deeds, birth and marriage certificates, Social Security number and certified copies of the death certificate.

A letter of instruction goes a long way to helping your spouse keep things in order. This simple letter enables a surviving spouse or another person to locate important documents such as bank accounts, life insurance policies, safe deposit boxes, or collectibles. Give details of all accounts and how bills are paid. These days many bills are paid by automatic payment to a debit card, bank account or credit card.

Make sure each spouse has a credit card in their name. If not, get one today. Know also that if the deceased spouse is primary on the credit card, once their death is reported that credit card will no longer be active. If both spouses don’t have a card, you could be left with difficulty in paying bills once the deceased spouses’ cards are terminated.

Get professional help

This is a stressful time, and you need help. Getting expert help from an attorney, tax professional and/or financial adviser can be invaluable during this stressful time. It is vital to bring a family member or friend with you to meetings so you will have an extra pair of eyes and ears to process information.

Settle the estate

Most people name their spouse as their executor. The named executor in the will is the person responsible for carrying out the terms of the will and settling the estate. Settling the estate means following specific legal and administrative procedures to ensure that all debts are paid and that all assets are distributed to the rightful persons.

Life insurance

A claim will need to be filed for life insurance benefits. Locate the policy and contact the insurance agent or company directly to begin filing a claim. Most claims take only a few days to process. Check with your spouse’s employer to determine if any group benefits are available.

Social Security and government benefits

Contact the Social Security Administration to determine if there are spousal benefits available. You may be eligible to file a claim for retirement, survivor or death benefits. If you qualify, six months of retroactive benefits are available. However, you must file within a specified period. You may be entitled to the $255 lump-sum death benefit.

If your spouse ever served in the military or some other government employment, you and your children may qualify for a separate survivor’s benefit. The Department of Veterans Affairs, formerly known as the Veterans Administration, may even provide educational assistance, home loans, federal job preference, or other assistance. estate planning

If you are the widow or widower of a former federal, state or local government worker, contact the Federal Employees Retirement System or the local organization that coordinates benefits for the state, county or municipal employees.

Retirement accounts

If your spouse was part of a profit-sharing plan, 401(k) plan, SEP (for self-employed workers), or some other plan, you must consider how the benefits will be distributed to you.

Usually, the most advantageous strategy with an IRA or 401(k) is to roll over the account into a new account in your name. This keeps the funds tax sheltered until you retire and begin withdrawals. The plan administrator and your tax professional and/or financial adviser can help guide you toward making the best choice for your situation.

Income taxes

As the surviving spouse, you have several filing choices that may be appropriate. You may be able to choose married filing jointly, married filing separately, qualifying widow(er), or head of household. Whether you file a joint or a separate return for your spouse, you must write “deceased” across the top of the return, along with your spouse’s name and date of death. Your tax professional can help you evaluate the best filing status to choose. estate planning

• Start by making sure your will is up to date.
• Today, write a letter of instruction to your loved one to help with critical financial decisions and transition.
• Talk to your spouse about your household and business finances before it is too late.

From all of our staff at Trucker Tax Tools and Taxation Solutions Tax Relief, we would like to express a heart-felt thank you for all you do to keep America moving! Keep safe, keep moving. LL

This article has been presented by TruckerTaxTools.com, a division of Taxation Solutions Inc. – Tax Relief. Barry G. Fowler, EA, president of Taxation Solutions, has been providing IRS tax debt resolution and bookkeeping services to the trucking industry for more than 21 years. If you would like a free consultation, contact them at 877-966-2477. Their website is TruckerTaxTools.com. This article does not give and is not intended to give specific accounting and/or tax advice as everyone’s tax situation is different. Get more trucking tax advice here.