Finances After Loss
It’s the big question, without an easy answer, following the death of a loved one…
Where do I go from here?
Following one of the most devastating and challenging events in a person’s life, there are many financial questions that need to be addressed immediately, while still coping with an emotional loss. Questions that you once considered together are now being asked of to you alone. And these questions can be even more stressful if the surviving partner was not actively involved with the finances and assets.
A lot of people make big financial decisions right away and this can be a costly mistake. It may be more beneficial to your financial future to wait several months or even a year before making significant changes or financial decisions in your life. Seek advice from someone that truly has your best interests at heart, someone whom you trust. If you have questions and feel uncertain, this is the time to ask for help and guidance. You don’t have to face all of your choices alone.
Once you feel more confident with your knowledge, you will be able to make educated decisions based on what you have learned. I would advise you not to move forward with changes to your finances (or other areas) until you feel completely comfortable. This is a great time to be loyal to yourself.
A Personal Story
My dad passed away suddenly at the age of 57; my mom was 56. She looked at me and asked that question: “Where do I go from here?” I sat down with her and reviewed what she had, to figure out how to make the funds work best for her current and future financial needs. She pleaded, “Can’t you just take care of it for me?”
My response was that she should be involved in financial decisions that would affect her then and later. She gently reminded me that she and my dad had told me that I would need to be there and “deal” with her finances, to which I replied, “I remember, Mama, but I want and need you to be involved.” I had watched her write the checks each month and balance their household budget my whole life. She was capable of handling this, but in that overwhelming moment, she wasn’t looking at the role she would need to play with her finances. After losing a spouse or partner, many people are overwhelmed to the point where they really don’t want to make these decisions, leading them to a place where they can be easily taken advantage of by others.
A Cautionary Tale
Here’s an example of that very thing from my own story. Someone that had helped my father get life insurance came around tried to intimidate my mom in her time of mourning, pressuring her into buying other insurance products with the proceeds she would receive. This woman was more interested in her own incentives than my mom’s financial needs.
But my mom needed the modest amount she was receiving to maintain her life until Social Security benefits kicked in. Using those funds otherwise would have required her to find a way to increase her household income. It is truly unfortunate. Not all individuals that surround a person during such trying times have your best interest on their minds.
A New Job
Managing finances can be a full-time job following the loss of a spouse. Give yourself some space and get some guidance. Set aside time to devote to your current financial picture. This may mean developing new plans and financial goals on your adjusted income. Keep in mind that you may have more money immediately after your loss because of payouts from insurance policies, sale of extra vehicles, or liquidating assets. Although it may seem you have extra money available now, your monthly income may decrease going forward. Your housing needs may change, leading to big changes with your finances.
My point in presenting these various scenarios is to encourage you to think about your own personal needs. Taking the time now to review important details with your spouse before one of you experiences a loss may give you peace of mind and a viable financial plan. Taking this step may provide comfort when you need it the most.
What to do together now to be prepared for your financial future
1. Visit your financial advisor together.
Times of crisis are not the time to have a crash course in investing or a meeting with someone you haven’t already developed a relationship with. If you don’t have an advisor, go to a trusted source and talk to one.
2. Discuss your wishes with each other.
Take the time to review, discuss, and reassess your finances periodically. This may include wills, beneficiary designations, why things are invested the way they are currently, and health care directives.
3. Have a safe place for passwords and need-to-know information.
- Keep a binder or thumb drive in a secure place. Consider a safety deposit box for originals with copies kept at home or office
- Know all account numbers with each financial institution and the types of accounts.
- Keep a record of key contact information for your financial advisor, insurance agent, attorney, doctors, etc.
- Securely store account user names and passwords, including security questions and answers.
- Securely store security codes and personal identification numbers (PINs).
- Know the location of items such as birth and marriage certificates, divorce papers, vehicle titles, mortgage documents, life insurance policies, retirement plans, and stock certificates
- If you have one, take an inventory of what is in your safety deposit box, its bank location, and where the keys are kept.
The loss of a loved one is devastating, but its effects on your finances don’t have to be. Thinking ahead can be hard to do, but it will make a dramatic difference should trying times come.