After the death of a loved one widows and widowers sometimes make crucial mistakes when it comes to financial matters. For example, in dealing with IRAs the IRS may impose certain penalties for early withdrawal before age 60, and some spouses are also unaware that there is no requirement to withdraw until after age 70. Surviving spouses can also collect Social Security survivor benefits when they turn 60, but the earlier they claim it, the less benefits they will receive had they waited until retirement age.
The more recent (and more likely) potential mistake concerns a deceased spouse's unused estate tax exclusion amount under the ecently enacted portability provisions. For estates without credit shelter and marital trusts, the estate must file an estate tax return to pass the unused estate tax exclusion amount (currently $5 million) to the surviving spouse - otherwise it will be wasted.
See Gerry W. Beyer, "Financial Mistakes of Surviving Spouses," Wills, Trusts & Estates Prof Blog (Nov. 13, 2011).
Posted by Andrew Hodes, Associate Editor, Wealth Strategies Journal.
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