No one wants to think about losing a spouse, but unfortunately it’s a big part of life that you have to plan for. A large portion of that planning should be financial. Use the following tips to help you prepare your finances for the potential loss of your spouse.
While both men and women lose their spouses, it’s a well-known fact that women live longer than men, and therefore more women are widowed than men widowered. A recent study by WiserWomen.org found that half of widows lost at least 50% of their income following the loss of their spouse. Because of these harrowing statistics, this article is focused on how women can prepare their finances in the event they are widowed. However, the majority of the tips are also applicable to men who might lose their wives.
- Get Involved – One simple way to be more prepared to take over finances after you lose your spouse is to get involved in the finances now. Be a part of financial decisions, attend meetings with your advisors, and make lists of important information and contacts from bank accounts and brokerages to insurance companies and attorneys.
- Utilize Life Insurance – There’s a reason why we have life insurance, so use it. Its one of the easiest ways you can replace income after you lose your spouse. Not to mention it’s tax-free. Get started on your policy by finding a trustworthy life insurance company from lists like this one.
- Prioritize – It’s easy to get overwhelmed with payments and finances after a loss, so make a prioritized list of your obligations now. This list should include items like your mortgage, car payments, taxes, and insurance premiums. More flexible items, like medical bills, can wait until you’ve stabilized after the loss.
- Research Your Survivor Benefits – You’re entitled to certain benefits as a widow, and its important that you research and understand these benefits to best maximize them. Keep track of both your and your spouse’s Social Security and pension benefits, too. Learn more about your benefits on the Social Security website.
- Consolidate – A person’s assets are generally frozen after his death to allow time for the proper legal steps. If you and your spouse have lots of different individually titled investments, it can take even longer to sort them out after a death. Consolidate your accounts now to make it easier and more expedited after a death.
- Take Your Time – Take your time making major decisions and changes after a death. In fact, experts say that you shouldn’t make any big financial decisions for the first year after losing a spouse. It’s vital that you organize and plan for a loss before it occurs so you can have the cash flow to go slow with big decisions.
- Trust Your Team – Lean on your financial and legal team after a death. They know your specific case, and can offer you expert advice when your judgment might otherwise be clouded. Count on your attorney for help with the probate process and estate planning, your CPA for complex post-death tax issues, and your financial advisor for an accurate financial assessment and game plan. Don’t have a team? Get one. You can start by reading some of our other articles about finding quality advisors.
Here are some books that may help you:
- Finding Your Way After Your Spouse Dies
- It’s OK That You’re Not OK: Meeting Grief and Loss in a Culture That Doesn’t Understand
- I Wasn’t Ready to Say Goodbye: Surviving, Coping and Healing After the Sudden Death of a Loved One
Did you find these tips helpful? Do you have personal experience with the topic? Share below.