Banking & Finance

How to make financial decisions when you lose a spouse

August 29, 2018
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Grief and mourning affect each of us uniquely, but all widows and widowers experience a difficult dilemma. On the one hand, the world seems to demand rapid responses to a barrage of critical questions, financial and otherwise. On the other hand, it’s usually very difficult to make big decisions while you’re grieving.

Here are some helpful suggestions if you have been recently widowed (or you know someone who has), and pre-emptive steps you can take before you face the death of your spouse.

If you’ve been recently widowed

Don’t decide anything you don’t have to, especially about your finances

You may not expect this advice from a financial adviser. But grief is a biological process that affects your ability to make good decisions regarding your finances. Even small choices can feel overwhelming. For this reason, we recommend people put off anything that can wait during a time of grief.

Most financial decisions are not as urgent as they might seem

Of course, service providers, friends and family (who may also be grieving) may mean well, but their sense of urgency — and your own — may be unnecessary. Certainly, address what requires urgent attention, but give yourself a break and assume most financial decisions can wait.

Create the space to focus on matters that actually are urgent

Putting long-term plans on hold also helps create space to take care of the essentials, such as making funeral arrangements, managing immediate expenses and simply taking care of yourself and your dependents. Make sure you have enough cash available to make daily purchases and pay your bills, so these don’t become a source of added stress. It’s also best to ensure your family’s health care coverage remains in place.

Lean on others, even if you don’t usually

Focus on relationships that help relieve your burden and avoid those that burn up your limited energy. For practical and emotional support, turn to friends, family, clergy and similar relationships. For financial and legal paperwork, contact professionals such as your financial advisor, CPA and insurance agent. Be cautious about forming brand new relationships at this time.

Decisions to focus on after your immediate grief has passed

Assess where you are

When it comes to lifetime transitions, each of us is on our own schedule. Eventually the time will come when you’re ready to circle back to those larger decisions you put on hold. Once you feel ready to take on some of the mid- and long-term items, start by gathering information, including wills and trusts, insurance policies, financial statements, mortgages, retirement benefits, safety deposit box contents, business paperwork, military service records and club memberships. Getting organized can feel like a healthy part of the grieving process.

Look forward

Continue reaching out to others to address your evolving needs, help you get organized and help you develop a plan for yourself for the future. Turn to your financial adviser for assistance with organizing your investment accounts, shifting ownerships as needed, closing or consolidating unnecessary accounts and sorting through your spouse’s retirement and work benefits. Work with a lawyer to settle the estate. Meet with an insurance specialist to revisit your health care and life insurance coverage. Speak with your accountant about necessary tax filings. Contact creditors about resolving any outstanding debts. And finally, firm up your ongoing banking and bill-payment routines.

Pre-planning is an act of love

If you’re reading this before experiencing the loss of a spouse, it cannot be emphasized enough how important it is to pre-plan for when one or both of you pass away. Planning can simplify, or even eliminate, some of the most agonizing decisions surviving family members must face during one of the worst times in their lives. As such, organized finances and updated wills, trusts, powers of attorney, living wills (advance directives) and pre-planned funeral arrangements may be among the most loving gifts you can give your family, especially if you have dependent children. Also, make sure you have enough life insurance and that beneficiaries for your retirement account are as you want them.

There is no better day than today to work on a plan that is good for your family. And, plan to take the time to reward yourself for your planning by doing something you enjoy with your loved ones today.

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