By Ted Stricker, CFP®
Grief does not pause for paperwork. Within weeks of losing a spouse, forms arrive from banks, insurers, and the IRS, each one asking a question you may not be ready to answer.
In our long experience, estate planning after this kind of loss unfolds over months, through a series of decisions that shape how your wealth is preserved, taxed, and eventually passed on to the people you love. Some of these decisions carry deadlines. Others simply carry weight.
Here are six areas to prioritize in the months following a spouse’s death.
1. Prepare for your tax filing status to change.
In the year your spouse passes away, you can typically still file a joint return (Married Filing Jointly), which preserves lower tax brackets and a larger standard deduction.
- If you have a dependent child: You may qualify for Qualifying Surviving Spouse status for up to two additional years, preserving joint filing tax rates.
- If you do not have dependent children: In the year following your spouse’s death, your status shifts to Single.
The “Widow’s Penalty”: Surviving spouses often experience higher effective tax rates in the years after their spouse passes because single tax brackets are half as wide as joint brackets, even if total household income remains high (due to pensions, RMDs, or investment income). Reviewing income streams and considering strategies like Roth conversions early can help cushion this impact.
Also review your Social Security survivor benefits during this same window. Depending on your age and your own earnings history, the timing of when you claim can affect your monthly benefit for years to come. If your spouse had a higher benefit, you may claim this benefit instead of your own from now on. Understanding this timeline now, rather than at tax season, gives you room to plan around it.
2. Retitle assets and update beneficiaries first.
Before you revise a Last Will or a trust, look at how your accounts are titled and who’s named as beneficiary. Retirement accounts, life insurance policies, and jointly held property often transfer outside of probate, based entirely on the named beneficiary. If your spouse was named as primary beneficiary, that designation needs to change. The same goes for jointly titled bank and brokerage accounts, which typically need to be retitled in your name alone.
This step often gets overlooked, and it can undo the intent of a carefully written will. Remember that inherited assets (real estate, brokerage account holdings, etc.) owned by the decedent receive a “step-up” in cost basis to the value of the asset at the date of death. Work with your financial advisor or tax advisor to accurately determine the new basis of these inherited assets.
Steps to Take:
- Primary beneficiaries: If your deceased spouse was primary, update primary and contingent designations immediately.
- Tax basis step-up: Before selling or moving assets from jointly held brokerage accounts, confirm the date-of-death valuation. Inherited assets generally receive a step-up in tax basis, reducing or eliminating capital gains taxes when sold.
3. Revisit your will, trust, and powers of attorney.
Your existing estate plan was built around two people. Now it needs to reflect one. Review who serves as your executor, trustee, and agent under a power of attorney, especially if your spouse held any of those roles.
Incapacity documents deserve particular attention here: a healthcare proxy and financial power of attorney name someone to act on your behalf if you’re ever unable to make decisions yourself, and if your spouse was that person, you’ll want someone else named without delay. If your estate plan includes trusts for children or grandchildren, this is also a good time to confirm the successor trustees are still the right choices.
Steps to Take: An estate plan built for two people must now be adapted for one. Focus on three critical roles:
- Executor / trustee: Who will administer your estate now and carry out your wishes?
- Financial & medical powers of attorney: Who do you now wish to have legal authority to make healthcare and financial decisions if you become incapacitated?
- Contingent beneficiaries: Where should assets flow if your primary choices are no longer applicable?
4. Understand your stepped-up basis before selling anything.
When you inherit assets like a home, a brokerage account, or a business interest, the tax basis often resets to the fair market value on the date of your spouse’s death. This is known as a step-up in basis, and it can substantially reduce the capital gains tax owed if you eventually sell those assets. For assets you held jointly with your spouse, half of the value steps up.
Selling too quickly, before you’ve had appraisals or documentation in place, can make it harder to substantiate that stepped-up value later. Give yourself time to gather the paperwork before making any sale, and loop in a tax professional before you list a house or liquidate a concentrated stock position.
5. Portability can protect a larger exemption.
For 2026, the federal estate and gift tax exemption is $15 million per individual. If your spouse didn’t use their full exemption during their lifetime, a provision called portability allows you to claim the unused portion, which can raise your own exemption well beyond $15 million.
Claiming portability isn’t automatic. It requires filing an estate tax return, IRS Form 706, within a specific deadline after your spouse’s death, even if no tax is owed. Missing that deadline can mean losing access to a significant amount of tax-free transfer, particularly for estates that have grown through real estate, business interests, or long-term investments.
6. Build a team, rather than relying on a single point of contact.
Estate planning after losing a spouse touches tax law, trust law, retirement accounts, insurance, and investment strategy all at once. An estate planning attorney can update your documents. A CPA can walk through the tax filing changes. A financial advisor can help you rebalance a portfolio that may have been built around two incomes, two risk tolerances, and two time horizons.
Coordinating these professionals, instead of tackling each piece separately, tends to produce a plan where nothing gets missed, and where each advisor understands the full context of your situation rather than a single slice of it.
We’re Here to Help
None of this needs to happen in a single week, or even a single month. Some steps, like updating beneficiary designations, are worth handling early, since they take effect immediately and often outside of probate.
Others, like restructuring a trust or deciding whether to sell a family home, can wait until you have more clarity about your goals and your day-to-day life has settled into a new rhythm. What matters most is having a plan for working through the list, with people you trust helping you along the way, at whatever pace fits your life right now.
If you’re navigating this transition and want to talk through your options, we at Bernath + Rosenberg work closely with widows and widowers to update estate plans, coordinate with tax professionals, and build a strategy suited to this new chapter of life. You can learn more about the services we offer, or reach out directly to schedule a conversation by calling (212) 221-1140 or emailing info@brwealth.com.
Frequently Asked Questions
1. How does my tax filing status change after losing a spouse?
In the year your spouse passes away, you can typically still file a joint return (Married Filing Jointly), preserving lower tax brackets and a larger standard deduction.
- If you have dependent children: You may qualify for Qualifying Surviving Spouse status for up to two additional years to retain joint filing rates.
- If you do not have dependent children: Your status shifts to Single starting the year following your spouse’s death. Because single tax brackets are half as wide as joint brackets, surviving spouses often face higher effective tax rates (sometimes referred to as the “Widow’s Penalty”) even if total income remains high.
2. What is a “stepped-up basis,” and why should I wait to sell inherited assets?
A “stepped-up basis” resets the tax basis of inherited assets (such as a home, brokerage account, or business interest) to their fair market value on the exact date of your spouse’s death. For jointly held assets, half of the value steps up, while your basis remains the same.
- This adjustment can substantially reduce or eliminate the capital gains tax owed if you eventually sell those assets.
- It is important to wait before selling because liquidating property or stock too quickly—before formal appraisals or date-of-death valuations are documented—can make it difficult to substantiate that stepped-up value with the IRS later.
3. What is estate tax portability, and how do I claim my spouse’s unused exemption?
“Portability” allows a surviving spouse to claim any unused portion of their deceased spouse’s federal estate and gift tax exemption, combining it with their own to shield a larger amount of wealth from federal estate taxes.
- 2026 Exemption Amount: For 2026, the individual federal exemption is $15 million.
- How to Claim: Portability is not automatic. To preserve your spouse’s unused exemption, you must file an estate tax return (IRS Form 706) within the specific deadline following your spouse’s death, even if no estate tax is currently owed. Missing this filing deadline can result in losing access to this tax-free transfer allowance.
About Ted
Ted Stricker, CFP®, is a partner at Bernath + Rosenberg with over 27 years of experience specializing in custom financial plans for business owners and affluent families. Since joining the firm in 2015, he has led the wealth management team in delivering practical, independent advice tailored to each client’s unique lifestyle and goals. Based out of the firm’s multi-state offices, Ted is a member of the Financial Planning Association and helps maintain Bernath + Rosenberg’s standing as a top-ranked national CPA firm in financial planning.
Professionals associated with Bernath & Rosenberg P.C. may be either (1) registered representatives with, and securities and advisory services offered through LPL Financial, Member FINRA/SIPC, a registered investment advisor; or (2) solely tax professionals of Bernath & Rosenberg P.C., and not affiliated with LPL Financial. Tax/accounting/CPA-related services offered through Bernath & Rosenberg P.C. is a separate legal entity and not affiliated with LPL Financial. LPL Financial does not offer tax advice or tax/accounting/CPA-related services.
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