Use of Household Records

I am with a non-profit group that works primarily with senior citizens. We are in the process of changing CiviCRM. I am one of the lead people in doing data entry and trying to get us switched over smoothly to CiviCRM. I have some questions that I am hoping that you can answer for me, however, just for the record I need to say that if there is any cost then please stop and go no further. I have no authority to authorize any action that would result in a fee.

My questions revolve around "Household" records and what impact would occur in changing them...We currently have individual records for a husband and wife as well as a Household record. The husband has died and I would like to know the best way to make changes so that we will keep the wife in the system as well as the donation information. Would I just need to go to the individual record of the husband and indicate in the "Demographics" area that he is deceased? If this is the case, would I be correct in saying that CiviCRM will automatically changed the communications information so that only the wife is addressed? Also, would we need to make any further changes to either the household record or the individual record of the wife? I have noticed as well that when setting up these relationship records that there is also an option for "Spouse". What would happen if we used "Spouse" rather than "Household"?

I thank you for your time.