After Mary’s husband of 20 years died unexpectedly in an accident, she must now do more than cope with the grief of losing a loyal companion; she must assume the critical financial decisions that affect her, her family and their future.
Mary’s husband was the family financial manager and record keeper. He oversaw the investments, organized their insurance policies and made major decisions about their assets. Now, widowed at 44, those duties fall to Mary.
According to the Women’s Institute For A Secure Retirement:
- One-third of women who become widowed are younger than 60.
- One-half of all women who will become widowed will experience the loss of her spouse by the age of 65.
How does one close out a spouse’s life while simultaneously assuming all of the financial responsibilities? Where does one begin?
Losing a loved one can be traumatic, emotional and overwhelming. When it comes to money matters, experts recommend that you deal first with the immediate financial concerns and then, when emotionally ready, tackle the long-term financial matters that affect your future.
When Life Changes
- Make funeral arrangements. You and your spouse may have discussed post-mortem wishes or made funeral/cremation arrangements in advance. If so, immediately contact the funeral home to begin the process. If not, be prepared for fees and expenses that can range from $2,000 to $10,000. If the deceased served in the military, contact the Veteran’s Administration to determine the availability of any burial allowance.
- Alert friends and family. Make a list of people to contact and ask key individuals to help you notify others. Asking for help from those close to you is essential for both emotional as well as practical purposes.
- Write the obituary. Often a family member will help you with this task. Submitting an obituary to your local newspaper serves as an official (and archived) notification and helps publicize donation wishes of the deceased.
- Order death certificates. You will need death certificates to claim property or benefits that belonged to the deceased, including insurance claims, Social Security benefits, veteran’s benefits, etc. Also, financial institutions will require death certificates to transfer funds and to re-title accounts. Order at least 10 death certificates from the funeral home, mortuary or cremation organization. States also provide death certificates through their vital records office.
Tackling Your Finances
- Gather documents. Difficult though it may be, it’s important to begin gathering documents that will be used to close out the affairs of your spouse. Documents include your marriage certificate, estate documents, spouse’s social security card, military papers, financial statements and insurance policies. AARP provides a checklist of documents to gather.
- Review household expenses. Make sure you have cash reserved to cover several months’ expenses. If you haven’t been involved in paying the monthly bills or managing the family debt, start reviewing your bank accounts and expenses. Your financial institutions can share passwords with an official death certificate. Make a list of debts, credit card balances, and notify creditors of the borrower’s death.
- Contact financial professionals and estate advisers. As soon as possible, contact your financial professionals – estate attorney, tax preparer and financial advisor. Your estate attorney can help clarify and advise you on what estate decisions you need to make immediately or what can wait.
- Assess assets. Get a handle on your assets, including your stocks, bonds, money market accounts and other liquid assets. When you face a significant life event such as the death of your spouse, making complex financial decisions should wait until you are emotionally ready. Especially if you have not been involved in the family’s major financial decisions, give yourself ample time. It’s best to wait several months or even a year after a spouse’s death to make financial decisions, such as selling your house, liquidating a portfolio or purchasing an annuity.
- Identify survivor benefits.
- Life insurance. Notify your life insurance firm to make a claim. The company will need an official death certificate to move forward with changes.
- Employer benefits. Contact your spouse’s HR department to learn how to access your spouse’s pension, 401 (k) and/ or other employer benefits.
- Social Security benefits. Depending on your age you may be eligible for Social Security survivor benefits. You will need information about your spouse’s employment, including W-2s.
Prepare for ‘What Happens If’
Sometime during your marriage you and your spouse may have discussed what happens if. But how many of us actually organize our financial lives in advance? In fact, a survey by Rocket Lawyer found that 64 percent of American adults don’t have a will.
While there may be a number of reasons why we don’t prepare for the inevitable, it’s only death that seems to spur us into taking action.
Don’t wait. Take the time now to prepare and organize important financial information and store it in a place that is easily accessible to loved ones.
Documents to complete include a will, advanced directives and a durable power of attorney among other legal papers. Also, update paperwork about beneficiaries and prepare a list of individuals who will be your executor, guardian or agent.
There are a number of commercial websites that provide guidance and samples of downloadable financial documents, including Practicalmoneyskills.com, Organizemyaffairs.com, and Aftersteps.com.
Plan Now for a Softer Landing
In 2009, Chanel Reynolds found herself overwhelmed and unprepared to manage her family’s finances when her 43-year-old husband died tragically in a bicycling accident. He was the one who organized their finances, had the passwords and made the long-term investment decisions. Her situation, like Mary’s, is one all too familiar to those whose spouses die prematurely.
Her advice to married couples: “There are a few simple things I wish I had taken care of before my life went sideways, like a will, living will and some details jotted down. Should the ground fall out from under your feet—plan now for a softer landing.”
The information contained in this article was developed from sources deemed to be reliable. This is not an investment recommendation or endorsement of any strategy contained herein.
© 2015 LederMark Communications
