Financial Journey
(featured column)

Time Marches On-Like It Or Not

by Karen Kuebler 

It is really hard to believe that it has been eight months since Bob has been gone. I continue to experience a variety of thoughts and feelings, both related to the grieving process while learning to survive on my own. Obviously, I can’t relate all that I am going through but I can share key learnings and ideas that I hope will help others.  More...

I’ll start by saying that this is a beautiful day to write this article. It’s snowing, the pine trees are covered in white powder, and I’m mesmerized with the calm and peace of the falling snow. And, since I’m snowed in, it also makes it a perfect time to write!

The process of writing these articles has taught me that it can be very difficult to separate the emotional side of loss from the financial aspect. Many of my thoughts will be a conglomerate of both.

As mentioned in a previous article, Bob and I discussed what we would want in the way of a service at the time of our passing. As difficult as this subject is to approach, it was very helpful for me. I wanted Bob to have his wishes respected, rather than second guessing myself as to whether I did the right thing for years to come. And you can believe me when I say I am a second guesser.

I made the choices because Bob wasn’t able to, but as I discussed them with him, he was very happy with the logistics of what I had chosen. We had a beautiful memorial service that was so personal to Bob. By working ahead to make these plans, the funeral home expenses, the memorial service and potluck dinner afterward cost about $2,500. We had a large turnout and everybody commented on how perfect it was for Bob. I would not have been able to do all of this alone – my friends helped me in organizing and handling separate pieces of the service. We actually were able to spend a few hours with friends by combining the service and dinner.

Key Learnings

If the person that has passed collected Social Security, it is imperative to call your agency right away. In our case, Bob was collecting his. They provide a small life insurance to the survivor of $250. It might not seem like much, but during a time like this, EVERY bit helps. It was enough to pay for a nice obituary in our local newspaper.

One of the first steps I took was to meet with a CPA/Tax Accountant. It was well worth the money to avoid making ignorant mistakes that could have cost me dearly in the future. Bob had two IRA’s in his name, with me as beneficiary. There are actually a few ways to handle and/or convert these, but I chose to have them converted to Inherited IRA’s. This allows me to withdraw money without penalty prior to the age of 59 ½. I can currently withdraw from his IRA’s without a penalty but do need to pay taxes on the amount withdrawn. However, if I were to withdraw from mine, I would be assessed a 10% penalty fee along with taxes due.

The next important step is to notify all accounts that you held jointly in order to remove the name of the spouse that has died. There is one exception to this, which I will discuss shortly. It is important to move accounts into your own name since you will be handling financial matters alone in the future and this is going to directly reflect on your credit score and history.

Key Learnings:

I learned another key lesson related to the medical bills accrued from Bob’s illness. In total, I had about $6,000 of unpaid bills after Medicare and the secondary insurance covered their portion. I was overwhelmed by the amount of money owed for medical bills alone.

I discussed my current financial situation with each of the providers. The two largest bills were from different hospitals. Through discussing my financial situation honestly, and being sincere, the first representative asked me to send a copy of our bank statement. Once she determined what I had told her was true, she wrote off the hospital bills due and has continued to write off any bills that have followed. Once I was successful with these bills, I called the other hospital and explained how our local hospital handled the balance due. The representative asked me to write a letter explaining the circumstances and have it notarized. Once I completed that, this provider also cleared out the balance. I had a few bills from individual providers and approached them the same way – they also wrote off the balances. The main point I made was that we were living from Bob’s Social Security income and withdrawals from his IRA. If we had another set of circumstances, I can’t predict what they would have done with the balances. Given the circumstances, I felt very blessed that they didn’t require payment once Bob had passed.

We had also accrued a huge amount of credit card debt in the last few years due to various issues: supporting family, medical bills, costs of traveling for medical services, etc. We had been paying our credit card bills in full each month up until a few years ago when several crises hit us at once. It was difficult for both of us because we didn’t like having the debt, but were living on the simplest spending plan we could in order to make the maximum payments possible each month.

At this point I am not receiving anything from Social Security and have to pull money out of our savings to pay for bills. Sadly, Bob and I had never mentally prepared for a scenario where one of us would be gone before we were both collecting Social Security benefits. It was time for me to make some painful decisions. I decided to cash in one of our bonds which would minimize the tax consequences to pay off the larger bills. When I called to discuss the bill, I discovered that Bob was the owner of the account and I was an authorized user. In actuality, I was not responsible to pay the bill and it would remain in this holding pattern until there was an estate left by Bob to settle the account. The problem I had with this was that I thought I was a joint member of the account and I had been making the decisions related to all of our finances, so I felt a moral obligation to settle this debt. The company was very understanding of my situation and said they would cut the bill in half if I could pay it in full. I wanted to settle the debt, even though I knew I wasn’t obligated to pay it.

In the end, I pulled money out of our savings to close out the debt and I’ll have to say I felt much better once it was done. Even if I am a little poorer! I believe that I will find a way to build up the savings. As I become stronger and more self-confident, I am beginning to believe in my resourcefulness again!

More to come—and much more to learn! Future things to share include handy work items around the house that I have learned to repair myself as well as steps I am taking to grow emotionally stronger. In the meantime, cherish every moment you have with your loved ones. To sum it up – Live, Love, and Learn!

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Copyright © 2010 by Karen Kuebler. All rights reserved.