Posted on June 18, 2018
The loss of a spouse can be a devastating, life-changing event. For women, losing a spouse can happen surprisingly early. According to the U.S. Census Bureau, almost half the women over 65 years of age in the United States are widows, and the average age of a new widow is 59. While women are more likely than men to face the loss of a spouse due to their longer life expectancies, the loss of a partner at any age can be one of the most difficult challenges a man or woman may face. Not only is there the emotional loss, but also the task of managing the family’s affairs — including all the finances — without the help of a spouse. Even if you’ve always handled your family’s finances, the number of financial and legal matters that have to be settled in the weeks and months following your loved one’s death can be overwhelming.
Sadly for many, becoming a widow or widower is a first step toward a period of time fraught with uncertainty and lack of control. It is critical, however, to address your family’s finances with ongoing proactive involvement to help secure your financial future and that of your family.
First, Take a Deep Breath
Before you start making any changes regarding the family’s finances, make sure to consider your own needs. The period following the death of a spouse can be a blur of emotions, and acting too soon, or making impulsive, irrational decisions can have damaging consequences that may be irreparable.
During this period of adjustment, it is often a good time to only make those decisions that are absolutely necessary as you begin to immerse yourself in the family’s day-to-day financial management. Experts suggest a “decision-free zone” for six to twelve months following the death of a spouse when it comes to major decisions.
There are several financial tasks that must be done in the weeks and months after a spouse’s death. If some matters are too overwhelming to tackle alone, don’t hesitate to ask family or friends for help or to seek the assistance of experienced professionals.
One of the most important, and most time-consuming tasks is to locate important documents and financial records. In order to settle your spouse’s estate, you’ll need to locate a number of important documents. These include your spouse’s will and other estate planning documents (e.g., trusts), insurance policies, bank and brokerage statements, stock and bond certificates, deeds, mortgages, Social Security number, passwords needed to access financial information online (e.g., online banking, credit cards), birth and marriage certificates, military discharge papers, and certified copies of the death certificate (we recommend that you obtain 12-15 copies).
We recommend setting up a communications tracking and filing system. To help keep track of all the details, set up a system to record incoming and outgoing calls, emails and mail. For phone calls, keep a notebook handy where you can write down the caller’s name, date, and subject of the call. For email, create a separate file to sort all emails pertaining to estate and financial correspondence. For mail, keep track of what you receive and whether a response is required by a certain date. Make a list of the names and phone numbers of the people and organizations with which you are in contact and post it in a central location. Finally, create a filing system for important documents and correspondence with separate folders for different topics — i.e., insurance, government benefits, tax information, bank records, estate records, and so on. Staying organized will help you to feel more in control and will make it easier for you when planning discussions begin.
We recommend seeking professional advice to help settle the estate and file tax returns. Expert help from an attorney, accountant, financial and tax professional or wealth advisor can be invaluable during this stressful time. The most important consideration is whether or not these individuals are obligated to act as your fiduciary. Trusting a wealth advisor begins with fully understanding their motives – make sure they are compensated only by you. Consider bringing a family member or friend with you to meetings so you will have an extra pair of eyes and ears to process information.
An attorney can help you review your spouse’s will and other estate planning documents and begin the estate settlement procedures. If you are named executor in the will (or if you are appointed as the personal representative), you will be responsible for carrying out the terms of the will and settling the estate. Settling the estate means following certain legal and administrative procedures to make sure that all debts of the estate are paid and that all assets are distributed to the rightful persons. An attorney can tell you what procedures to follow. A tax professional can help you file certain federal and state tax returns that may be due, such as Estate Tax and Income Tax Returns. Professional guidance is strongly recommended in preparing the tax returns because the filing rules are quite complicated, and many tax-saving opportunities might be overlooked by an unqualified preparer. An independent wealth advisor can help you by conducting a comprehensive review of your financial circumstances and identifying any retirement and survivor’s benefits that may be available to you. A wealth advisor can also help to make sure all your other providers are working toward your best interests, and that any financial decisions being made will benefit you in the long term.
You’ll need to contact several institutions for information on how you can file for benefits to which you are entitled.
Develop a Plan
The next phase consists of adjusting to a new normal and beginning the wealth planning process. This includes updating all your existing policies, accounts and documents. This can be a time-consuming process, and you may need to contact each financial institution/insurance carrier to change account names and/or update contact information.
This phase also will include a complete evaluation of short-term and long-term liabilities and assets. You may have immediate expenses to take care of, such as taxes, property insurance, or other outstanding debts your spouse may have incurred. While life insurance claims are being processed, anticipating the upcoming expenses will help avoid surprises.
Practically speaking, we recommend curbing expenses where possible. Find out where you stand financially before you make any large purchases, sell property, loan money to others, make large gifts to relatives, make significant charitable contributions, or make changes to your lifestyle or domicile.
Make sure you have one or more credit cards in your name, and when you can, order a free copy of your credit report and review it for accuracy.
After the initial legal and financial matters related to your spouse’s death are taken care of, you’ll enter a transition phase when you’ll be adjusting to your new financial circumstances.
Long-term planning should be holistic and detailed. It is imperative that all your advisors and providers are in sync and communicating to ensure all parts of your wealth plan work together. When making critical decisions, it’s best to make sure you have all the information necessary to avoid emotional decisions. For discretionary financial decisions, it is critical that any advisor you choose is obligated to put your interests first, and acts as a fiduciary on your behalf.
As you navigate this terrain, you might find it helpful to work with an independent wealth advisor who can help you by:
No matter how carefully an estate’s legal affairs have been managed, family wealth specialists agree that personal dialogue and clarity in communication across generations are keys to successful wealth transfer. Your professional advisors should encourage and facilitate this communication and be sensitive to the interpersonal and emotional factors unique to your family when recommending strategies.
Generally speaking, men and women may have a different set of expectations and requirements from their financial professionals. As you work with a wealth professional, make sure he or she is responsive to what you say you need, not what the advisor thinks you want. Don’t be afraid to ask questions, and make sure you understand all your options before making important decisions.
As you face these difficult challenges, remember you are not alone. There are support groups, clergy, therapists, counselors and resources to help as you transition into this new phase of your life. As women are generally more likely to experience the loss of a spouse, there are many resources available written specifically for women. A few resources we recommend include Moving Forward on Your Own: A Financial Guidebook for Widows by Kathleen M. Rehl, Widow To Widow: Thoughtful, Practical Ideas For Rebuilding Your Life by Genevieve Davis Ginsburg and A Widow’s Guide: Your Legal and Financial Guide to Surviving the First Year by Anna Eckert Byrne. There are also a few resources that are written for either men or women including Details After Death: Navigating the Logistics After a Loved one Dies by Mark Colgan and Healing a Spouse’s Grieving Heart: 100 Practical Ideas After Your Husband or Wife Dies by Alan Wolfelt.
Remember that at times it may be two steps forward and one step back. Take comfort in the fact that you are doing the best you can to make the best decisions — financial and otherwise — for yourself and your family.read article
Important Disclosure: Legacy Family Office is registered as an investment adviser with the State of Florida. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. Registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. The firm is not engaged in the practice of law or accounting. All investment strategies have the potential for profit or loss. Hyperlinks in this article are provided as a convenience and we disclaim any responsibility for information, services or products found on websites linked hereto.