Life after loss often involves navigating numerous changes, including in your financial situation. We take the time to understand you, your history with your spouse, and what you want the next chapter of your life to look like. We are interested in your story and relationship so we can help create a path to your future.
Our primary focus is to make sure that you are going to be alright. This means that we’ll talk about you and your finances, including topics such as the income you will need, changes to your tax situation, and updates to your estate plan.
At Mercer Advisors, our experience with widows like you has taught us that a financial planning checklist, which we partner with you to create and carry out, can help relieve your concern about what to do next. Let us help you get started.
We can be your guide through widowhood – helping you move from grief to grace.
On Average, Women Live Six Years Longer Than Men
You’re not alone – given life expectancy, most women become widows at some point in their lives.
Source: National Vital Statistics System, National Center for Health Statistics
5 Tax Tips for New Widows – and What not to Do
There are many questions that you and your wealth advisor should discuss after the loss of your spouse. As you think about filing taxes, you might be wondering, “When should I being filing a single return?” or “Can I file as a qualified widow?” Read on for our top tips on filing taxes as a widow.
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Filing a single return
If you do not remarry before December 31 in the year that your spouse passed away, you are eligible to file a joint tax return for that year. This helps you because many deductions and exemptions are larger for married taxpayers filing jointly. However, please talk with your wealth advisor as soon as possible to talk about your strategy for the following year.
Filing as a qualified widow
Some bereaved taxpayers may file as a qualified widow for up to 2 years following your spouse’s death. This allows you to file at the same tax rate as when your spouse was alive. There are a number of criteria that need to be met that you should discuss with your wealth advisor.
Value basis for inherited assets
In many cases, you’ll be able to claim a “stepped-up” basis for assets following your spouse’s passing. Said differently, the attributed cost basis is determined by current fair market value rather than the cost at the time of acquiring the assets. This is meaningful for real estate assets and marketable securities that have appreciated significantly.
Home-sale capital gains exclusion
Married couples filing jointly may exclude $500,000 of capital gains from the sale of a primary residence. If you’re thinking about selling your home, please speak with us to determine if it is in your best interest to sell your home while you qualify for the married couple exclusion.
Required minimum distributions (RMDs) for inherited retirement accounts
Now is the most important time to talk with a wealth advisor about your personal situation. If your partner had an IRA, 401(k), 403(b), or other qualified retirement account, you likely inherited those assets. If that’s the case, mandatory withdrawals, tax consequences, and ordinary income may apply depending on your age and the age of your spouse at the time of their death.
The Majority of Women Will Become Widows in Their Lifetime
Unfortunately, most women are likely to experience the financial implications of losing a spouse during their lifetimes. If you are in this position, Mercer Advisors can help. We’ll work together to create and carry out a plan for your future.
