THINGS I'VE LEARNED ABOUT FINANCES AS A WIDOW

I spend several mornings each week dealing with the many loose ends following the death of my spouse.  I know that much of what I am dealing with is due to the fact that many things were managed by my husband and left in disarray (because his death was completely unexpected) and others that I was not privy to due to his business and his desire to "shield me" from the reality of our financial situation.
In any case, if it is helpful at all for recently widowed women who find this post, I am going to set out a few things I have learned.

1.  Everyone says you need a lot of certified death certificates.  Frequently mentioned is to get at least a dozen of them.  Because of my husband's business - I got about 20 of them. Turns out this is one of the few areas where modern technology has changed the rules.  Many places were just fine with a scanned and emailed copy.  Some copied the original I brought in person and gave it back.  In fact, many requested that the Social Security number be blocked out for liability and privacy concerns.

I suggest starting with half a dozen and then order more if needed.  As they cost about $23.00  per copy - it makes no sense to have any extras sitting in a file - like I have.

2.   My husband was self employed.  I worked so we had healthcare benefits.  I didn't make a lot of money, but enough that it had an effect come tax time.  We changed my  401k  contribution to try to ease that - so 40% of my pay went into that account pre-tax.  Since here was a matching element - it grew fairly fast.  He asked me to take a large distribution shortly before he died.

The distribution he had me take was intended to go into a new retirement account he had opened -  a SEP IRA.  He made an issue of letting me know how I could access the account - however, either he didn't know or didn't consider the consequences if he died and we did not go through probate.  Under those conditions, I have no claim or access to the funds - at least per Vanguard Brokerage Services.  There is only a few hundred dollars in the account that they won't pay out to me for whatever arcane rules they get to hide behind.  (Unless I spend more money than is in the account to provide legal documents that satisfy "the rules".)

So the large sum I had just taken out of my 401k to be deposited into that account remained in my hands because he became ill before the transfer could be made.  The sole saving grace I managed out of the mess of finances I inherited.

The lesson?  Learn more about the various kinds of accounts there are and question the rules around them.  I did that when he became eligible for his pension.  He had planned to defer it until he was 70 because the value was so much higher.  I questioned what the rules were if something should happen to him before that milestone - and we learned I would end up with a tiny fraction of the amount as his widow.  We changed the option and he began taking the pension at 65.  Thank goodness I questioned it - wish I had done the same on the SEP IRA!!

3.  Credit cards - sigh.  

In the weeks following his death, each creditor received a phone call requesting the cancellation of the account and any auto payments.  That was followed by a notification letter and a death certificate.  AmEx kept calling and sending letters seeking probate information - we did not go through probate.

Apparently, even though I didn't sign anything, receive or use a card, a couple of the accounts somehow have my name attached to them.  The law is pretty vague on this especially in community property states. 

I would not be liable for the accounts he opened specifically for his business.  He was a solo practitioner and never filed as a corporation - so the accounts can be considered personal.  The credit companies can come after me to pay that debt.  How hard they will come at me remains to be seen.  I was advised to give out no information to anyone who contacts me from the companies or from third party entities.  I no longer answer calls from unknown numbers.

The good news as of now -  the companies he had personal loans with have not come to me for payment.  They seem to be less aggressive about repayment.

I did hear from the bank for my personal credit cards that they are reducing my credit limits by half.  The credit reporting companies are definitely tagging me with his outstanding debts.  I realize it is early days and this is probably far from over, I keep my personal cards and auto loans paid up and hope eventually my credit rating will improve.

4.  With the pandemic, the IRS is backed up.  It does appear that the very expensive tax attorneys I hired are working some magic on the issues of back taxes, payment plans, liens, etc.  Should know soon.  The State of California - not so much - they want payment in full and it is a doozy - wouldn't you know he had a very good income last year.  They are giving me five years to pay off the 2019 taxes.

5.   Bottom line - if you are facing big tax and credit issues - I would advise that the expense of hiring professional help is worth it.  Not those credit fix companies!!  Law Firms or  CPA firms which specialize in these issues.  Call and talk to multiple people until you feel a good fit and communication style.  I had some pretty insulting and negative conversations until I found the great people I am working with.

6.  Remember that this will all settle out.  It may take time and more money that you don't really have to spend to help resolve it - but it will be resolved over time.  This is one area I think it is best to let time pass before making any decisions. The pressure is enormous to just make it go away - resist that urge and take your time.  

THE REVEAL

Tom and I had certainly not foreseen that this would happen so soon in our lives - we expected a good 10 years before major health issues might occur.  We lived a healthy lifestyle and had no medical issues.  We had, however, spent time discussing things like quality of life and how far we would or would not allow medical intervention for each other.

I served as his advocate and was respected by the medical staff in that role.  His mental capacity was compromised and he had trouble speaking on and off during his hospitalization.  When he was lucid and could communicate well, he had many things he felt strongly about telling me.  He was extremely focused on his work, he made sure his clients had been taken care of.  He repeatedly told me about financial stuff like passwords and when bills were due that he handled. Even when he was delirious or sleepy, he insisted on holding his phone and having his blue tooth in his ear - during the nights I would wake up to him talking away as if he was conducting business.

It was clear to the family that in the last days he was asking for our help, asking to be let go. Things had deteriorated so significantly that much of his day was spent undergoing care that was painful and intrusive and not creating any gains.  We were all in agreement about stopping treatment and the staff handled the end very well with great respect and consideration.  He knew we were all there and the last word he said was "love".

The entire family retreated to our house to sleep.  In the morning we started making lists of things that needed to be done - divided it up and got to work.  We are a family of "doers".  Each of us in our own state of shock/grief/bewilderment we set about our tasks.  As the day went on, it became clear that there was a big problem.  I knew that I would not be able to afford the big house we had just rented, but the financial situation was significantly more dire than I had ever imagined. 

He would be very angry that I am even revealing this to others, but I think it is very important not to gloss over things - not just because this is the grim reality of my life now, but because it should serve as a warning.  I am not one of those old fashioned women who left everything up to my spouse.  I knew we had tax debt because I signed the taxes and payment plans every year.  I argued with him about his refusal to pay his quarterly estimated taxes as a self employed person.  He always argued back that if he had bad months back to back he might not be able to pay the rent or his bills to keep his practice going.  I know he lived in constant stress about his business month to month. 

Going through the finances, notifying creditors of his death, determining what accounts had to be paid or closed was significantly aided by the fact that he had created a comprehensive list with all his accounts and passwords.  What going through that revealed was gut wrenching.  Long story short (sorry, I guess this is not so short) he had massive consumer debt in his name that I did not know about and he had gotten behind on the tax payment plans and the IRS was after us. Big time.

Not only is finding I would have to deal with all this another kick in the gut, the kids were all exposed to this information and, quite frankly, we are all really pissed off about it.  Yes, he had no idea he was going to get sick and die.  Yes, he clearly was upset and obsessed with this throughout his illness and confinement in the hospital. Yes, he was trying to shield me with the belief he was somehow going to get it taken care of over time - but he didn't end up with time. 

I feel such pain knowing how worried he was all during his illness, he knew this hammer was out there and if he didn't survive it was going to come down on me. 

On the other hand - REALLY?  Keeping all this from me for years? Not being honest?  Pretending like we could actually purchase a house again?  Agreeing I could retire?

This reveal was only the beginning - much more to follow.