Surviving Spouses Pose Tricky Relationships For Advisors

August 16, 2021

The death of a spouse can lead to complex circumstances for advisors if a wealthy survivor never had much to do with the couple’s taxes and financial planning.

“Losing a spouse unexpectedly is every significant other’s worst nightmare. One minute you’re happily married, the next you’re emotionally and financially independent,” said Spuds Powell, senior wealth advisor for Kayne Anderson Rudnick in Los Angeles.

“The last things on a surviving spouse’s mind are the financial and tax issues,” added Michelle Espey, tax partner at Farrell Fritz P.C. in Uniondale, N.Y. “Many married couples assign financial and tax responsibilities to only one spouse.”

Surviving spouses sometimes fall into the trap of believing their finances are already in order and that their own finances will remain the same—or improve due to a windfall. “Many are immediately surprised by the increase in income tax that often follows when their filing status changes and their income increases due to additional income received from inherited assets,” Espey said. “Others are shocked to uncover historical compliance issues.”

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  • Related Practice Areas: Tax
  • Featured Attorneys: Michelle E. Espey
  • Publications: Financial Advisor Magazine