7 Financial Tips for Widows: Managing Money after a Traumatic Loss
Updated: May 16
Losing a spouse is one of the most traumatic life events anyone will face. In addition to the grief and pain widows face upon losing a spouse, death triggers an avalanche of financial tasks that need to be addressed.
Widows facing daunting financial considerations need sound, trusted financial advice. Below are 7 financial tips for widows.
1. Take Your Time
While there are financial issues to address, they do not need to be done immediately. Making decisions while in the midst of grieving and mourning your loved one is not wise. Your brain and decision-making can be clouded and rushing through choices can end up in costly mistakes.
Hold off on the major decisions. Instead, focus on those that have more immediacy – your monthly cash flow, paying the bills, filing for death benefits, and ensuring you have cash liquidity.
2. Build Your Team
As you sort through your finances, you want a team of professionals you trust to guide you, help you make decisions, and have your best interests at hand. Ideally, your team will include:
A financial advisor that can assess your current financial situation, build a financial plan for you, assess risks and help create an estate plan
An attorney to guide you through the probate process, draft and review estate planning documents, update your will and powers of attorney and sort through other legal matters you may have
A certified public accountant to manage estate tax obligations, advise on tax-related matters, and file tax returns
3. Gather Necessary Documents
Before making major decisions, it will be necessary to gather documents that may be in your spouse’s name, your name, or both. Among the necessary documents are:
Estate planning documents, such as your will and trusts
Retirement account documents
Business ownership statements
Birth, death, and marriage certificates
4. Manage Life Insurance and Survivor Benefits
Life insurance policies usually come from either an employer or an insurance agent. You can contact the company’s human resources office or the agent to start the paperwork to move the process along.
If your spouse had a pension plan, it is possible you will qualify for survivor benefits, which would allow you to continue to receive your spouse’s monthly pension benefits for the rest of your life.
Social Security benefits may also apply. If you have reached retirement age at the time of your spouse’s death, you can receive 100 percent of their Social Security benefits. You may also be eligible for a one-time Social Security death benefit.
If your spouse was a military veteran, your Veterans Administration office can help determine if you are eligible for survivor benefits.
In all cases, it is important not to cash any checks before talking to a financial advisor.
Your spouse's life insurance was probably purchased by two different providers: an insurance agent and a business. If your policy is issued through an insurance agent, contact that agent if your husband passed away. It's important to have a lawyer to start paperwork and start the process. You can contact Human Resources directly if your partner's employer has a coverage policy on their behalf. Note: Whether an insurer offers an variable annuity or an insurance broker it's important that you consult your advisor before deciding on the insurance product to purchase.
5. Handle Probate Matters
If your spouse’s estate did not have a named beneficiary, it will have to pass through probate. The executor will initiate the process, which is overseen by a probate court. The process can be lengthy and includes filing a petition with the court, notifying beneficiaries and creditors, and inventorying property.
After your spouse’s debts and taxes are paid, the remaining assets are distributed to beneficiaries.
6. Consider Your Housing Arrangements
Housing can be a very emotional consideration after a spouse’s death. You may want to remain in the home and pay it off with the death benefits you receive. You may worry about being lonely and consider moving in with a child.
Housing considerations are major financial decisions. Moving out of a marital home can also trigger additional grieving and a sense of loss. There are also mortgage and tax considerations.
These are not decisions that need to be rushed and you should evaluate the financial, social, and emotional impact of any decisions.
7. Get Support
Above all else, know that you do not need to face these financial matters alone. At Solas Wealth, we provide wealth management advice to people in these circumstances. Contact one of our experienced wealth managers and schedule a meeting to discuss what matters to you.
Extra Information & Tips
Don't write a check to anyone without official documentation
Normally the victims of an emotional breakdown such as marriage loss are left to their own devices by the criminals. Unfortunately, that isn't true. Fraudsters can examine your funeral papers and pretend to be your insurance agent and tell you that you are owed millions of dollars on your husbands life insurance.
When people call you saying you owe money, you should contact them and see the debt. You may also ask them to mail you a bill. Keep an eye on stressful situations. Surely someone will demand money right away, but nobody else can get it.
Consider the long term
Once you've handled your immediate financial concerns, it's time to consider your long term future decisions. You will eventually be required to make a personal estate policy update. You must review your investment portfolio to determine the right course you should take.
You will need to determine if you want to leave the place you rented for a while or stay in the house where they live. You might need something to make up your mind and maybe remodel your home. All these should be considered and perhaps discussed by your advisor
Get Financially Organized
If you married a spouse who was a big financial supporter who had to deal with the financial burdens. If not, do not panic. You might encounter some challenges as you get acquainted with these things but it is ok. Start with assessing the finances. Calculation of your new source of income.
Once your money is back, calculate your current debts (such as funeral expenses). Make an updated monthly budget. Financial advisors can assist you. Your goals will change if your spouse leaves.
Don't be a banker
You might be approached by a family member asking for a loan. If you wish to assist them please resist that urge. You are people. No one is sure what time it will last. You don't know how difficult it might be. Please do not be guilty!
The kids are asking newly widowed parents for help, saying things that would help them. You probably know of pre-flight security procedures which require that you wear oxygen masks to yourself and to help others. So this is exactly what it means.
Press the Pause Button
The period immediately before an individual's death can prove to be the hardest time. The idea is to have millions of decisions in mind that your attention will be directed in many directions. Also take a few seconds to breathe.
For more effective planning, avoid rushing through important financial decisions causing serious negative consequences. Once things are calm and it's time to go through the grief, you can move on to other financial issues.
Keep away from big decisions
You may have to sell your car to get a bigger home. In many instances though, there shouldn't be such an action when planning funerals. Sometimes it is overwhelming. Selling your house can sometimes be emotionally hard, even for someone you love who died recently. There is a possibility that some people will try and gain your business and might be tempted to price an asset in order to sell it instead of making it the best possible investment.
Assemble a team of professionals
When settling your marriage you need an expert team who can assist you throughout the process. A financial consultant will be able to assist in evaluating and preparing your future finances and assets. Make sure the financial advisor you use is someone who knows widows. A lawyer can assist you with a probate case, review estate plans and update your will.