The funeral is over.
- Dealing with pension survivor options
- Social Security spousal benefits
- Life insurance proceeds
- Changing the title on your home and other assets
- Making sure your bills continue to get paid on time
- Updating your will and estate planning documents
- and possibly much, much more.
Even if you’re a strong, fiercely independent woman by nature, do yourself a favor and take advantage of the help that’s available. Working with your trusted advisors, tackle the decisions that need to be made immediately. Then, once those are taken care of and you’re in a better place, you can move onto the decisions with long-term financial implications.
1. Probate the will
2. Deal with life insurance
3. Apply for Survivor Benefits
4. Retitle Accounts
5. Review Loans, Bills and Financial Obligations
6. Cancel Payments
7. Consider the Long Term
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While You’re Here . . .
Inform Your Spouse’s Creditors
The first step is ensuring that your spouse’s death is on file. Failing to alert creditors to your spouse’s death can lead to problems ranging from suddenly canceled credit cards to attempted fraud if your spouse’s identity is stolen. And yes, that can happen after death. Financial planning for widows needs to start with protecting the widow, and making this first step.
Find Your Trusted Person
A trusted person can be a family member, or it can be a professional like a financial planner. Regardless, find a person who you can trust on financial matters, and ask them if they can help you with financial questions and situations. A second pair of eyes can help you spot discrepancies in bills, difficulties in certain situations, and other problems, and a second pair of hands can support you as you do the hard work of unraveling your spouse’s finances.
Be Smart, Not Timid
Women tend to invest conservatively while men tend to invest aggressively, which means that they balance each other out as a couple. Losing that aggressive component can, believe it or not, put you at financial risk, For example, it’s possible to invest too conservatively and outlive your savings! Look at your finances and evaluate your risk carefully, so you’re still covered in case of the worst.
Hold Off On The Big Decisions
You may well be in a situation where you need to sell off unnecessary assets like a car or even move to a smaller home. But, in most situations, you shouldn’t be doing this while planning a funeral or getting other major emotional events in order. It can also be emotionally overwhelming; selling the home you’ve lived in for decades can be emotionally trying even if you’re not dealing with a spouse that has passed away. You’ll be taking a chance that your seller won’t attempt to take advantage of the situation, or you may price the asset just to get rid of it instead of getting the full financial value out of it. If at all possible, delay these sales until you can make them with a clear head.
Get Your Spouse’s Papers In Order
Often the toughest task, financially, is getting all the papers in order; you need to get a sense of your spouse’s assets and debts. If they’re not well organized, you may have to get that in shape. But often it can provide some with a sense of closure, and it’ll give you a stronger overall view of your financial situation.
Don’t Write A Check To Anyone Without Official Documentation
You’d think that those dealing with an emotional setback such as a spouse’s death would be left alone by criminals. Unfortunately, that’s not the case. Fraudsters of all types will look carefully at obituaries, and then try to, for example, pose as your insurance agent and tell you that you owe thousands of dollars on your spouse’s life insurance policy. If somebody calls claiming you owe a debt of some sort, ask for their contact information so you can look up the debt, or ask them to send you a bill first. Be especially wary of high-pressure situations; if somebody is demanding money from you right now, they probably have no right to it.
You Assume Pension And Retirement Fund Obligations
When your spouse passes away, often a big question is what happens to the assets. Assets exclusively in your spouse’s name that are passed on to you may come with a set of obligations, as well. For example, if you inherit a 401(k), you might be required to withdraw money from that account under tax law, whether you need it or not. You may be eligible for specific benefits under your spouse’s pension. There are a whole string of obligations you may need to fulfill.
Don’t be pressured into making decisions
While you need to adhere to deadlines and any time-sensitive decisions, don’t make any other decisions until you’re comfortable and understand the pros and cons of your choices.
If you don’t feel like you have all the information you need to make a decision, then don’t hesitate to take more time to research the decision. Or ask for help from your trusted advisors as one or more of them has likely helped a client with similar decisions in the past.
And while friends and family likely have your best interests at heart, be wary of their well-intentioned advice. While a decision or strategy may have worked well for them, it doesn’t mean it’s the best decision for you.
Finally, be extra skeptical of anyone who wants to sell you something, especially if it sounds too good to be true. It’s unfortunate that there are salespeople, especially in financial services, who see new widows as easy targets for their financial product or scheme du jour.
At the end of the day, it’s your life, and there’s absolutely no one better equipped to make decisions about your life than you are.
Get (and stay) financially organized
You know from direct experience the difference it can make when you’re financially organized. If you and your husband had everything organized and you knew where everything was, it likely made the financial transition and decision making go much more smoothly.
On the other hand, if you and your husband weren’t well organized and didn’t have your financial house in order, it probably added to your stress and anxiety as you’re adjusting to life on your own.
The best way to get and stay organized is to keep your finances as simple as possible.
That means as few accounts and moving parts as are necessary to make sure your bills are paid on time, your credit score remains solid, and you always know what, and how much, is where.
In fact, in addition to the organizational benefits of keeping things simple, you can also automate a lot of your finances to take much of the day-to-day decision making burden off your shoulders.
And just think how much easier it will be for your heirs if all your financial matters have been well organized and documented throughout your life.
Don’t Be a Banker
You may be approached by family members asking for a loan, or even being as bold as asking for part of their inheritance early.
As much as you may want to help them out, please resist this urge.
You’re a person; not a bank.
You don’t know how long you’ll live. You don’t know what challenges you’ll face that some extra money might help alleviate.
And don’t fall for the guilt trip. Some kids have approached newly widowed Moms saying things like, “if Dad were still around, he’d help me out.”
You’re likely familiar with the pre-flight safety routine that instructs you to put the oxygen mask on yourself first before helping others. Well, the same concept applies here.
It was you and your husband’s money. Now it’s your money. No one else has any right to any part of the money you may well need months, years or decades in the future to support yourself.
And on that same note, be wary of people until you really get to know them. I’ve had women tell me more than once that a lot of older single men are looking for a “nurse”, a “purse”, or both.
It’s almost certainly best to keep money matters to yourself until you’ve really gotten to know someone (and their motives).
You Don’t Have To Go It Alone
Though you might feel shattered and alone right now, you don’t have to face your financial future by yourself.
Work with your current trusted advisors or seek out trusted advisors to help you evaluate your choices and make thoughtful decisions going forward – about your finances and more.
Most often, your team of trusted advisors will include an estate planning attorney, an accountant and a financial advisor who works as a fee-only fiduciary.
Without these experienced and empathetic partners on your team, you run the risk of making expensive, and perhaps irrevocable, decisions that could impact you for the rest of your days.
You’ll have a lot to deal with ranging from Social Security benefits to employer life insurance to going through the probate process.
Can you do it on your own?
Should you do it on your own?
I’m not sure you want to figure that out the hard way.
In my experience, you want to be in a position to explore and understand each of the myriad of issues you’ll be faced with and make the best decision for you (and the rest of your life) the first time. There are rarely any do-overs in this arena.
And even if you’re a seasoned executive with a background in finance, tax, and law, it still makes sense to involve other professionals who can bring some much-needed objectivity to your decision-making process.
Though you may feel alone in this endeavor, you aren’t. Not with your team of trusted advisors working alongside you and with each other.
And another word of caution: if something sounds too good to be true, it almost always is.
Be wary of people offering advice, even family, and close friends, trying to steer you a certain direction with your finances or your home. While some issues will need to be addressed sooner than later, you shouldn’t feel like you need to rush to make any decisions, especially involving your money.
Remember, Rome wasn’t built in a day, and neither will the process of addressing all the financial and lifestyle decisions be something you can run through in a couple of days or weeks.
Depending on the size and complexity of your financial situation, probate (the process of settling your husband’s estate) can take weeks or it can take years. Most often, it will take a few months.
Hopefully, by now I have conveyed the importance of assembling a team to help you navigate your first year as a widow.
Regardless of complexity, one of the best places to start is with a qualified and experienced estate planning attorney who can assist you with the probate process and all of its rules and deadlines.
Need help finding a good estate planning attorney?
Ask your other trusted advisors (accountant or financial advisor) who they would recommend, or feel welcome to give me a call.
While I know many good estate planning attorneys in and around the metro Atlanta area (where I’m based), I can also help you find a good attorney anywhere in the country through my network of financial advisors and other professionals.
Depending on the timing of your husband’s death, you may have some time before you have to deal with filing tax returns. Or you may not have much time at all before April 15th rolls around again.
If you’re reading this and it’s January 1st or later, I would begin working with your current accountant or start looking for one to help you with your income tax returns.
And if you want someone who can help oversee and organize the entirety of your financial life going forward, a fee-only financial advisor is an indispensable member of your trusted advisor team.
And yes, I’m admittedly a little biased when it comes to the benefits of a trusted financial advisor (that’s what I do and have done for the last 20+ years).
Once your trusted advisor team is in place, you’ll be fully equipped to deal with things like:
- Life insurance proceeds
- Employer benefits
- Government benefits
- Retitling accounts and assets
- Reviewing accounts, loans, bills, expenses and budgeting
- Planning for the rest of your life
Remember, going it alone when it comes to your money is simply a choice.
Bringing It All Together
By now you should have your trusted advisor team in place or know how to assemble one.
Perhaps you’re well into the probate process, or maybe it’s done.
And you’ve begun addressing some of the financial issues I mentioned above.
Whether you’re 36, 56 or 76 years old, you need to think about the rest of your life and managing your finances to support yourself and the life you want to live.
This may, but will not necessarily, involve investment management decisions.
Do you have long-term care insurance? What happens if you have to deal with a long-term care need of some sort or another?
(By the way, I don’t sell insurance, so you don’t have to worry about ever getting a sales pitch from me. But it’s an important area and one that deserves consideration. And one that I can help you evaluate.)
What do you do if one of your children or grandchildren approaches you for a loan? Or for an “advance” on his or her anticipated inheritance?
How do you handle someone from church or a family member who thinks they “know” exactly what you need to do and how you need to do it?
Unfortunately, even after you’ve addressed the initial steps that I’ve outlined in my article and these emails, there will always be money matters that need to be dealt with.
That’s precisely why it’s smart to have your own personal financial plan to serve as a roadmap and decision tool when you’re faced with the scenarios above or the endless list of other potential situations.
And let me be clear, a financial plan is nothing more than a starting point.
The real benefit comes from the ongoing process of financial planning. This is where we would regularly update and review your financial plan and look at any of the possible “what if” scenarios you might be considering or wondering about.
And building your financial plan can be as easy as starting with an exploratory conversation where we want to uncover your attitudes about money, your goals, your hopes and your dreams, and uncover what’s important to you and what your priorities are.
The rest of your life is already happening. Make sure you plan for it to happen according to your needs, wants and wishes.
I hope this information has been helpful. If you have any questions or would like to discuss anything further, simply request a call with me. It starts with a conversation.