Dear Liz: I think you left one thing off your list of things to do when your spouse dies. If you’re a homeowner, establish the value of the house as of the date of death. The best way would be to have a local Realtor run some comparables for your neighborhood. But even a printout from Zillow would suffice. As you know, a surviving spouse receives a step-up in basis as of the date of death so it’s important to know what the house was worth at that time for when the house is sold down the road. I see many clients at our CPA firm who have to try to figure out many years later what their house was worth when their spouse died.
Answer: Thank you for the excellent suggestion.
In fact, many things were left off last week’s list of things to do when a spouse dies, which is why I directed people to their attorney or accountant for a detailed checklist. I also recommended people consult a fee-only financial planner, since there probably will be decisions that require expert help.
Hi Liz,
I think you might want to clarify your advice re: establishing home value upon death of a spouse. Here is what you said: “As you know, a surviving spouse receives a step-up in basis as of the date of death.” I believe that the surviving spouse receives a step-up in basis of only the deceased spouse’s share.
Sally Pessin, Esq., CRPC
Thanks — the letter writer actually used that phrase, but I should have pointed out (again) that it’s true only for community property states. In other states, only the deceased spouse’s share gets the step out. Either way, it’s important to keep track.