Planning Ahead for a Surviving Spouse

No one is ever fully prepared for the loss of a spouse. While planning cannot make the emotional side easier, it can help reduce financial confusion, delays and difficult decisions for the surviving spouse.

For many couples, estate planning tends to focus on children, heirs or charitable intentions. Those are important considerations. But it is equally important to ask a more immediate question: If one spouse passes away first, will the surviving spouse have the access, income and clarity needed to move forward?

The answer depends on how assets are titled, which beneficiaries are listed, what planning documents are in place and whether both spouses understand the household’s financial picture.

Here are several planning areas couples may want to review together.

1. Build an Estate Plan That Supports the Surviving Spouse

Many married couples assume everything will automatically pass to the surviving spouse. In reality, how assets transfer depends on state law, account ownership, beneficiary designations and whether there is a valid estate plan in place.

A will is an important foundation, but it may not avoid probate. Probate is the court-supervised process of validating a will, paying final expenses and distributing assets. Depending on the state and estate complexity, probate can create delays, costs and added stress for the surviving spouse.

Couples may want to review whether certain assets should be structured to pass outside probate, where appropriate. Common planning tools may include:

• Joint ownership with rights of survivorship
• Revocable trusts
• Payable-on-death or transfer-on-death designations
• Updated beneficiary designations on retirement accounts, life insurance and investment accounts

Beneficiary designations are especially important because they often control how an account transfers, regardless of what a will says. That means outdated beneficiaries can create unintended outcomes.

A good planning exercise is to review every major account and ask: Who owns it today, who has access to it and where does it go when one spouse dies?

2. Organize Documents Before They Are Needed

Even a well-designed estate plan can be difficult to execute if important information is scattered or hard to find.

Couples should consider keeping key documents in a secure but accessible location known to both spouses and, when appropriate, the executor or trustee. These may include:

• Wills and trust documents
• Powers of attorney
• Health care directives
• Life insurance policies
• Retirement and investment account statements
• Mortgage, loan and property records
• Tax returns
• Business ownership documents
• Funeral or legacy instructions

It can also help to maintain an asset inventory that lists what you own, where accounts are held and who to contact. A secure password inventory or digital access plan may also be important, especially for online financial accounts, cloud storage, email, mobile devices and recurring household bills.

The goal is not just organization. It is to make sure the surviving spouse can quickly understand what exists, what needs attention and who can help.

3. Review Life Insurance Needs

For working-age couples, life insurance can be a critical part of protecting the surviving spouse’s financial stability.

The death of one spouse may mean the loss of income, retirement contributions, employer benefits, caregiving support or household management. Life insurance can help provide liquidity during a period when the surviving spouse may need time and flexibility.

When reviewing coverage, couples should consider:

• Outstanding mortgage or debt
• Ongoing household expenses
• Childcare or education costs
• Retirement savings needs
• Final expenses
• The surviving spouse’s income and career flexibility
• Existing savings and investment assets

There is no one-size-fits-all amount. The right level of coverage depends on the family’s lifestyle, obligations, savings and long-term goals.

4. Plan for Health Care Coverage and Costs

Health care can become a major financial issue after the death of a spouse, especially if the surviving spouse or dependent children were covered under the deceased spouse’s employer plan.

A surviving spouse may need to evaluate coverage through an employer, COBRA, a state or federal marketplace, or Medicare if eligible. For younger surviving spouses, replacing coverage can be an unexpected and significant expense.

Health Savings Accounts can also play a role in planning. For 2026, the IRS lists HSA contribution limits of $4,400 for self-only coverage and $8,750 for family coverage. HSA funds are generally used for qualified medical expenses, though they typically cannot be used for insurance premiums except in limited circumstances. ₁

If one spouse has an HSA, beneficiary designations matter. A spouse listed as beneficiary can generally inherit the HSA and continue using it for qualified medical expenses. If someone other than a spouse inherits the account, different tax rules may apply.

5. Consider Long-Term Care Planning

Couples often assume one spouse will care for the other later in life. But planning should also consider what happens to the surviving spouse.

Long-term care can be physically, emotionally and financially demanding. Adult children may want to help, but they may not have the time, resources or ability to provide full-time care.

Long-term care planning may include insurance, earmarked savings, home equity considerations, family conversations or a broader retirement income plan. The right approach depends on health, age, assets, family support and personal preferences.

The important step is to discuss the possibility before care is needed. Waiting until a health event occurs can limit options.

6. Coordinate Social Security Timing

For retired or near-retired couples, Social Security decisions can affect the income available to a surviving spouse.

A surviving spouse may be eligible for survivor benefits based on the deceased spouse’s work record. The amount can depend on the survivor’s age, the deceased spouse’s benefit and when benefits are claimed. The Social Security Administration notes that survivor benefits can be as much as 100% of the deceased spouse’s benefit at full retirement age for survivor benefits, while claiming earlier can reduce the benefit. Delayed retirement credits earned by the deceased worker can also factor into survivor benefit calculations. ₂

For many couples, this makes the higher earner’s claiming strategy especially important. Delaying benefits may increase lifetime income for the couple and may also increase the survivor benefit available to the surviving spouse.

Social Security timing should be coordinated with other sources of retirement income, tax planning, health status and longevity expectations.

7. Understand Estate and Tax Considerations

For many married couples, assets transferred to a surviving spouse may qualify for favorable federal estate tax treatment. However, estate tax planning should not be ignored, especially for higher-net-worth families or families living in states with separate estate or inheritance taxes.

For 2026, the federal basic estate tax exclusion amount is $15 million for estates of decedents who die during the year. The annual federal gift tax exclusion is $19,000 per recipient. ₃

Couples should also understand portability, which may allow a surviving spouse to use a deceased spouse’s unused federal estate and gift tax exclusion. To elect portability, the estate representative generally must file Form 706, even if the estate is not otherwise required to file an estate tax return. The IRS notes that the estate tax return is generally due nine months after death, with a possible six-month extension. ₄

Because estate, income and gift tax rules are complex, a surviving spouse should work with a tax professional or estate attorney after a spouse’s death to understand filing requirements and planning opportunities.

8. Revisit the Plan Regularly

Estate planning is not a one-time exercise. Couples should review their plan after major life events, including:

• Marriage or divorce
• Birth or adoption of a child
• Death of a spouse, beneficiary or executor
• Significant change in assets
• Retirement
• Business sale or ownership change
• Relocation to another state
• Major tax law changes

Even without a major event, reviewing an estate plan every few years can help ensure documents, beneficiaries and account ownership still reflect the couple’s wishes.

Surviving Spouse FAQs

Who is considered a surviving spouse?

Generally, a surviving spouse is the legal spouse of someone who has died. The term can affect tax filing status, inheritance rights, Social Security benefits and other planning considerations.

Can a surviving spouse file a joint tax return for the year their spouse dies?

Generally, if a spouse dies during the tax year and the surviving spouse does not remarry before year-end, the surviving spouse may be able to file a joint return for that year. IRS guidance notes that the year of death is typically the last year a surviving spouse can file jointly with the deceased spouse. ₅

What filing status applies after the year of death?

After the year of death, the surviving spouse may need to file as single, head of household or qualifying surviving spouse, depending on their situation. The qualifying surviving spouse status may be available for two years following the year of death if IRS requirements are met, including having a qualifying child and meeting household support rules. ₅

Why do beneficiary designations matter?

Beneficiary designations on retirement accounts, life insurance and certain investment accounts generally determine who receives those assets. They should be reviewed periodically and after major life events.

Does a will avoid probate?

Not necessarily. A will directs how assets should be distributed, but assets passing through a will may still be subject to probate. Other tools, such as trusts, joint ownership or payable-on-death designations, may help certain assets transfer outside probate when used appropriately.

Final Thoughts

Planning for the death of a spouse is difficult, but it is one of the most important financial conversations a couple can have.

The goal is not to predict who will pass first or plan only for the most likely scenario. The goal is to create clarity, access and financial stability no matter what happens.

A thoughtful plan can help the surviving spouse avoid unnecessary confusion, reduce delays and make decisions with greater confidence. Coordinating with a financial advisor, estate attorney and tax professional can help ensure the plan reflects your assets, family needs and long-term goals.

 

 

 

₁ https://www.citizensbank.com/learning/heloc-draw-period-and-repayment-period.aspx

₂ https://www.ssa.gov/survivor/amount

₃ https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax

₄ https://www.irs.gov/instructions/i706

₅ https://apps.irs.gov/app/understandingTaxes/hows/tax_tutorials/mod05/tt_mod05_07.js

This article is for informational purposes only and should not be interpreted as specific advice. You should make decisions based on your unique objectives and financial situation. If you are unsure please work with an appropriate advisor to review your specific circumstances. Additionally, any statements made reflect our views and/or opinions and are not intended to guarantee any particular result.

OneDigital Investment Advisors LLC and their associates are not estate planners and cannot provide tax or legal advice.  Consult your estate-planning attorney or qualified tax advisor for specific advice regarding your situation.

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