How can the death of a spouse affect the surviving partner's financial stability and credit score, and what steps can be taken to mitigate these impacts?
We discuss financial challenges facing Ohioans aged 50 and over, with a specific focus on surviving spouses. Featuring consumer law attorney Laura Nesbitt, the episode focuses on the financial instability that can arise after the death of a spouse, emphasizing the importance of managing banks, bills, and credit scores effectively.
Laura highlights that accessing accounts often requires a death certificate, and autopay bills can become problematic without account access. Estate planning should extend beyond a will and power of attorney, incorporating detailed financial documentation to facilitate smoother transitions during crises. Technology aids like Monarch Money, Quicken, and password management tools can help manage finances and account access. Regular credit report checks from major agencies are recommended to monitor and manage accounts.
Addressing legal responsibilities, Laura advises against paying a deceased spouse's bills, except in joint account situations. She explains how nursing homes might wrongly bill family members and the need to verify any obligation to pay. Estates with assets or debts generally go through probate, allowing six months for creditors to file claims post-death. Informing credit bureaus of a spouse's death and freezing their Social Security number can prevent new debts and identity theft, while freezing one's own credit can be protective and temporary.
Laura discusses the burdens and stigmas of homeownership and bankruptcy. Full mortgage leverage can risk financial instability if the market drops, making Chapter 13 bankruptcy a viable solution for stripping second mortgage liens. She highlights that renting may be more economical for older individuals with no home equity.
The financial impact on surviving spouses can include reduced Social Security benefits and loss of additional income. Comprehensive financial information and family support are crucial, with open discussions about managing finances and knowing available resources. For families with dependents like grandchildren, seeking financial contributions from other household members is vital.
Laura emphasizes that people often delay considering bankruptcy despite its potential benefits, due to the credit industry's stigma. Bankruptcy can stop creditor contact and prevent further credit score damage. Suitability for bankruptcy depends on individual circumstances, with certain debts like student loans and recent tax debts being non-dischargeable.
Key Moments
00:00 Consumer law attorney, bankruptcy expert since 2009.
03:08 Importance of managing credit scores after spouse's death.
09:17 Utility bills can impact credit if reported.
12:40 Ensure personal account responsibility; avoid joint accounts.
13:24 Keep financial accounts separate to avoid issues.
16:32 Organize finances and passwords for estate planning.
22:07 Check credit reports quarterly to monitor accounts.
24:08 Verify responsibility before paying deceased spouse's bills.
27:42 Consider freezing credit, especially for security.
31:28 Research carefully before entering debt management programs.
35:47 Evaluate finances and debt; bankruptcy may help.
38:25 Chapter 13 bankruptcy can strip 2nd mortgages.
40:09 Older spouse survivor faces reduced income sources.
43:09 Generosity often leads to personal financial debt.
47:27 Merging firms for comprehensive tax and bankruptcy services.
49:00 In-house services streamline, avoid restarts, ensure continuity.
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Recorded in Studio C at 511 Studios (my.captivate.fm/www.channel511.com) . A production of Circle270Media Podcast Consultants (my.captivate.fm/www.circle270media.com) .
Copyright 2024 Carol Ventresca and Brett Johnson
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The views and opinions expressed by the experts interviewed on this podcast are their own and do not necessarily reflect the views of the podcast hosts or any affiliated organizations. The information provided in these interviews is for general informational purposes only and should not be considered as professional advice. Listeners are encouraged to consult with qualified professionals for specific advice or information related to their individual circumstances. The podcast host and producers do not endorse or guarantee the accuracy, completeness, or reliability of any information prov...