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Twelve Months of Financial Milestones
Working with Financial and Legal Advisors |
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twelve months of financial milestones
As the healing process continues, you may feel up to looking to the future, even as you continue to finalize your loved one’s affairs. These milestones will help you do that. • Discuss your tax situation with an advisor who is knowledgeable about taxes, especially if you learn of any problems with tax returns filed by your loved one in prior years. If your loved one died late in the year, you will have to handle these tax matters before six months have passed in order to meet the April 15 tax filing deadline. Taxes can be handled in your loved one’s estate settlement. • Review your own will if you have one and update it as necessary. Create a will if you don’t have one. • Determine your financial assets, liabilities, and net worth. This worksheet will help you calculate this information. • Review your life, home, and car insurance policies and coverage with your insurance company or companies. If you have young children, you may want to increase the amount of life insurance you carry. Also, don’t base your home insurance on the amount you might receive if you sell your home. Instead, make sure it is enough to cover the cost of rebuilding your home if it is destroyed. • Contact the custodian or trustee (usually a bank, mutual fund, or employer) of your loved one’s IRAs, 401(k), and other retirement accounts. If you are the spouse and beneficiary, you have several options concerning how you want to handle the assets in these accounts. As a general rule, you can request that IRA assets be “rolled over” to a new IRA in your name, or you can maintain the existing IRA in your loved one’s name and continue as the beneficiary of that IRA. In the case of 401(k) and other retirement accounts, you can leave the assets in the account, or have them directly rolled over to a new IRA in your name or to your account in your employer’s retirement plan. You can simply withdraw the assets, of course, but you will have to pay income taxes on them and, depending on your age and other factors, possible early withdrawal penalties. The advice of a financially savvy friend, financial advisor, or tax advisor can be valuable when making these important decisions.
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Within 6 Months
