Losing a spouse is considered the most stressful life event that someone can experience. You are not only grieving for the loss of your partner, but you must also come to terms with the fact that your life will never be the same again. You will need to make decisions for yourself and any minor children, which can have a major impact on your lifestyle going forward. At a time like this, you need a financial advisor who will listen to your needs to deal with urgent matters and longer-term goals, and help you be smart about money in widowhood.
How to be Smart About Money in Widowhood: The Steps
Financial Issues in the Early Days After Losing a Spouse
When your spouse first passes away, you will most likely have immediate expenses (funeral costs) to look after in addition to your day to day household costs. The first order of business is to understand your cash flow needs and what income or investments there are to cover them.
You may be too overwhelmed at this point to work out the numbers yourself and so you may want to seek advice and guidance from people you trust. Remember, everyone will have thoughts on what you should do; however, few understand your personal situation. This is where a financial advisor can greatly add value as they can create a personalized cash flow statement for you based on your unique circumstances and advise the best way to cover your money needs going forward.
Major Life (and Lifestyle) Change
While over time, you will start to feel more in control of your life and financial situation, the days, weeks and months immediately following the loss of your spouse will no doubt be very difficult. All of the new found responsibilities and decision making often become overwhelming, especially if you have been appointed as the executor of your spouse’s estate. The paper work will be never ending. Don’t be afraid to ask for help from family and friends who have been through this process or from your financial advisor. This is a time when you are most vulnerable and so it is essential that you are dealing with people who have your best interest at heart.
Hopefully, you and your spouse did some estate planning beforehand so all their assets pass through to you seamlessly and preferably through “joint tenancy”, as beneficiary or through the Will. If your spouse passed on without a Will then they will have died “in testate”. This will be another painful process to undertake. Seeking legal guidance is advisable.
Looking at the Financial Road that Lies Ahead: After the Estate has been Settled
At this stage you will need a lot of information to make the best decisions for your financial future. The first thing you should do when you are ready is to gather all your financial documents (Will, insurance policies, investment and bank account statements, papers to your home) and make an appointment with your financial advisor. Your advisor can provide you with several ways to plan for the unexpected and how to manage your investments going forward. Don’t be afraid to ask questions or express concerns to them, as you are now solely responsible for your financial future.
Money and decisions pertaining to it will be an essential factor for you at this point in your life as it could potentially change your financial future dramatically. There may be issues you will have to deal with such as having to downsize your home or seek employment , which could add more stress to your life. However, someone who has recently lost her spouse should put off making any major decisions for at least 12 months since grief in all of its stages (shock, sadness, anger, etc.), can make it challenging to consider the long-term consequences of a choice made in haste.
Life Insurance
Did your spouse have any coverage? Insurance is one of the greatest gifts you can leave to your spouse after your passing. It is money in your hands immediately or soon after the passing of your spouse that can be used to cover immediate expenses, as well as pay off any outstanding debt and take care of cash flow needs for years to come.
The best advice I can provide is if you have an opportunity before the passing of a loved one, ensure all aspects of their estate have been taken care of. It will make the days after the passing a bit less stressful and chaotic.