The Tax Chick Podcast Musings of a Tax Chick - Practical issues to consider on the death of the 1st spouse
May 16, 2025
Explore the crucial considerations after the first spouse's passing. Learn about cash flow planning and access to credit to support the survivor. Dive into the tax implications of death, focusing on probate versus income tax. Amanda emphasizes the importance of gathering asset information and updating beneficiary designations. Discover the differences between insurance needs for first-to-die and last-to-die scenarios. Finally, she shares tips for preparing digital access and running a 'fire drill' to ease future stress.
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Don’t Only Plan For The Last Spouse
- Estate planning often focuses on the last spouse to die, which misses risks for the first spouse to die.
- Crash-test the plan for the first-to-die scenario to reveal practical gaps before tragedy strikes.
Secure Immediate Cash Flow
- Check cash flow needs and identify which accounts will fund living expenses after the first spouse dies.
- Verify joint accounts have proper survivorship to avoid frozen funds at a critical time.
Preserve Credit And Account Access
- Review credit access and ensure the surviving spouse has credit in their own name before the other dies.
- Add both names to key utility and service accounts to avoid disruption after a death.