Estate Planning: Newly Widowed

A new special feature in the law, portability, allows widows and widowers to add any unused exemptions of their most recently deceased spouse to their own personal exemption. This isn’t automatic. The executor of the deceased spouse’s estate must file a federal estate tax return, even if no tax is owed. The return is due within nine months after death, but a six-month extension is allowed. That makes the death of a spouse the wrong time to skimp on professional advice.

Other planning moves, too, should be made soon after a spouse’s death. Estate plans often call for certain elections to be made after the first spouse passes. You should contact your attorney to make sure the right elections are made within the necessary time limits. Revise your will and living trust and name new beneficiaries for any retirement assets you inherited from a spouse—otherwise your own heirs could lose income tax benefits associated with these accounts. Also, make sure your Durable Power of Attorney and Healthcare Power of Attorney name someone other than your spouse.