The odds are high that most women will become single at some point in their lives; current statistics indicate that almost 11.5 million women are widowed. Because a significant number of married women are likely to become single, either because of death or divorce, it is more important than ever for women to understand the first steps toward empowerment when they find themselves in the position of suddenly being responsible for all the financial decisions.
First Steps
Because losing a spouse is an emotionally tough time, managing financial tasks may feel almost impossible. In addition to consulting with your wealth advisor, ask for help from a trusted family member or close friend. We’ve written previously about the difficulties encountered by those who have suffered the loss of a spouse; here is a recap of some of the most important first steps that bereaved spouses should take:
- Gather all relevant documents, such as a will or trust, life insurance policy, birth certificate, marriage certificate, death certificate (order at least 12 from the funeral home as you will need them to claim benefits), your spouse’s Social Security card, investment account statements, and retirement or pension plan statements.
- Talk with your estate planning attorney to review your spouse’s will or trust and address beneficiary distributions.
- Contact financial institutions and begin changing the name on the accounts, as needed.
- Notify the Social Security Administration of your spouse’s passing to claim the death benefit and see if your spousal/survivor benefits need to be adjusted.
- Send a letter to all three credit bureaus to get copies of your spouse’s credit reports to make sure you’re aware of all existing debts.
- File claims for any outstanding medical care benefits with your spouse’s health insurance provider.
Staying Organized
A recent widow can expect a deluge of paperwork: documents regarding insurance, employers, social security, and investments. He or she should expect help from the advisor in organizing this information and prioritizing it. The many tasks that a survivor faces upon a spouse’s death can confound even those who have been able to plan carefully for the eventuality. The best way to wade through the myriad documents and paperwork facing the survivor at this stage is to create a simple filing process for it. It is advisable to save all financial statements and other documents for your attorney, accountant, and wealth advisor to review.
The Emotional Journey
Indeed, the best way of handling the financial requirements of widowhood, experts say, is to integrate them into the natural process of grieving. Psychologist J. William Worden outlines four tasks that each mourner must accomplish. Though these tasks focus on emotional recovery, each can also be related to aspects of financial well-being.
- Accept the reality of the loss. This is the first step a survivor must take: letting the shock of loss transform into acceptance and grief, eventually coming to understand the need to realign one’s life, emotionally, financially, and otherwise.
- Permit yourself to experience the pain of grief. It is important to recognize that a survivor must grieve. It is a painful, lonely process, but one that is essential to healing. In the case of younger survivors with small children, this stage may be postponed out of the need to “be strong” for the children. Finding this emotional “space” sometimes means waiting a while¾six months or so¾before dealing with financial issues and perhaps waiting an additional six months before making long-term decisions.
- Adjust to a new and unfamiliar environment. This is a critical step for survivors facing the challenge of new and unfamiliar financial issues, crucial in achieving independence not only financially but in many other ways as well. Many widows and widowers are making financial decisions on their own for the first time. They must gather the will to do so and surround themselves with trusted advisors to guide them along the way.
- Begin investing energy in new directions. This includes forging new relationships, including ones with family, friends, and even oneself. Again, in the particular instance of finances, this can mean finding a trusted advisor as well as a friend or family member to attend meetings alongside the survivor and serve as moral support and as a sounding board for crucial decisions. It also signifies a transformation toward financial independence. The death of a spouse marks the beginning of a transition that revolves around three closely intertwined areas of life: emotional, legal, and financial.
A Team Approach
Even six months or a year following a spouse’s death, widows are likely still undergoing a heart-wrenching transition. In some cases, she may never have had to make critical financial decisions and certainly never needed to make them alone. Different people have different reactions to this new role. While no one can take the place of a lost spouse or make decisions for a survivor, widows can often benefit by engaging a team of experts and delegate the responsibility of planning for the future. A key member of this team, which also includes an estate attorney, an accountant, and perhaps an insurance specialist, is the wealth advisor.
A good wealth advisor will gather all the relevant information surrounding the survivor’s situation, evaluate it, and establish a priority ranging from immediate concerns¾usually providing enough liquidity to handle short-term expenses¾to the long term, including retirement and estate planning. Especially given the confusion that can often accompany the grieving process, it makes sense to build a team of trusted experts.
At The Planning Center, we want to provide the benefit of trusted expertise for clients who are undergoing the crucible of grief. Our fiduciary responsibility obligates us to make recommendations that keep the client’s best interests foremost. To learn more about how we can provide guidance after the loss of a loved one, please visit our website.
