A Financial Guide After the Loss of Your Spouse

The loss of a spouse comes in many forms, but many of the challenges are the same. Whether your spouse has passed away, or you have become their caregiver, or you are going through a divorce, you will be facing many of the same financial concerns. 

This guide is intended to help you through this difficult time as you work toward building a clear view of the next chapter in your life. 

Click here to download “The Next Chapter: A Financial Guide After Losing Your Spouse”

Who Should Be on Your Financial Team?

During such an emotional time of fluctuation in your life, the first thing we recommend doing is assembling a financial team to help you navigate some of the big decisions you will face soon.

If you don’t already have any of these on your team, don’t worry. The right professional will be able to step into your situation and help you get it all sorted out—even if you don’t fully understand it yourself. 

So who should be on your financial team?

1. Financial Advisor

A financial advisor comes first on our list because we act as the coordinator between all of the professionals on your financial team. 

financial team

Our job is to understand the big picture of your life goals. In other words, we make it our business to know everything about you, so it just makes the most sense that your planner would be the coordinator of everyone on your team. 

We have helped multiple people through the death of a spouse and divorce by helping to track down all their assets and understand their entire financial picture.

2a. Estate Planning Attorney

When you are going through the loss of a spouse, an estate planning attorney is basically an essential. They can help you update your will, change beneficiaries, sort out power of attorney, and more.

An estate planning attorney will help you navigate tax liabilities of giving and draft all the legal documents you’ll need.

2b. Attorney

Having a legal, professional ally during this time is indispensable. If you think you may run into anything with property ownership, family issues or other areas of dispute, you’ll want an attorney on your side.

You may be able to find one attorney to fulfill your estate planning and legal needs or you may want a different one to fulfill each role. 

3. Accountant

Depending on the complexity of your situation, tax law can be incredibly complicated when it comes to updating your estate plan. A good accountant can save you from making decisions with wide-ranging ramifications during this time. 

Some accountants help with tax planning, but most don’t, so it’s important that you have a financial planner on your team who understands how to manage your portfolio in a way that minimizes your tax burden

4. Insurance Agent

After your spouse is gone, you’ll want to have an objective person help you consider your insurance needs and update it where needed. A good agent can help you make sure you are covered for everything you need—and that you aren’t paying for coverage you don’t need.

For instance, without your spouse as a potential care partner, you may find that you want long-term care insurance more than you would have before.

5. Other Specialists

Depending on your situation, it may be wise to add other specialists to your team to help in areas that your spouse may have handled before. 

If you’re a business owner, then you’ll likely want a bookkeeper to help keep your day-to-day finances in order. If you own properties, you’ll likely need an attorney to handle any matters that arise with tenants or real estate.

If you’re a few years into retirement, you may want a senior care specialist to help coordinate anything you need help with. 

While you’re considering putting together a team of professionals, it’s also important that you build an accountability team to help you stay on track.

Who Should Be Your Accountability Partners?

Taking time to properly grieve your loss is essential to maintaining emotional, spiritual and physical health. Sadly, people often find themselves wanting to withdraw and start letting things slide during this time. 

While a team of professionals can help you navigate the worlds of tax, finance and legal matters, accountability partners can help make sure you hold fast to the decisions you have made and the actions you need to take.

A good accountability partner is someone who: 

  • Knows you well enough to recognize when something may be wrong
  • Isn’t afraid to ask you tough questions and challenge you when you need it
  • Is proactive and will check in on you regularly—they won’t just wait for you to reach out to them

We recommend choosing a close friend or a sibling rather than one of your children. Your children will often be taking on other responsibilities during this time, and they may find it hard to help when they are also grieving their loss.

If your spouse passed away, you may also consider joining a support group for widows as they know the unique challenges you are facing.

Now that you have your team around you, it’s time to figure out what to do next. 

Click here to download “The Next Chapter: A Financial Guide After Losing Your Spouse”

What Do You Need to Take Care of First?

Here are the three main steps we take to help people navigate the process of taking sole control of their finances after the loss of a spouse.

1. Decide What Needs Immediate Attention and What Can Wait

Advisors often say to avoid making any big decisions right away after losing your spouse. At such a difficult time, you’re at greater risk of making decisions based on emotion than what is best for you in the long run.

We agree that many decisions should be delayed—but there are some that just can’t wait. 

When we work with clients who have recently lost their spouse, we always sit down first thing and help them get up to speed on their situation. In order to know what needs your attention right away, we need to get a complete picture.

Ideally, you will have had the chance to walk through your finances with your spouse before they passed, but that is rarely the case. Often, the surviving spouse has gaps of knowledge regarding their financial situation that need to be clarified.

It may feel strange to have someone outside your family telling you about your situation, but that’s why you hire an advisor. We act as a kind of financial detective at this point, pulling together all the details so we can better understand where you are. 

We’ll clarify questions like:

  • Do you understand all of your statements, assets, etc.?
  • Where do you want to be a few months from now?
  • Which obstacles are currently present?

As we’re figuring out your situation, we’ll determine what needs immediate action and what can wait. 

Immediate items may include:

  • Making sure all legal documents are up to date
  • Determining where your income is coming from
  • Understanding all of your statements

The majority of other decisions can wait, including:

  • Where to live
  • Asset allocations and other changes to your portfolio
  • Whether to sell larger items such as your spouse’s car
  • Tax status changes

2. Identify Obstacles and Possible Solutions

About 50% of widows find that they lose at least 50% of household income after their spouse passes. Nearly 40% struggle to figure out what they are entitled to from Social Security and how to initiate benefits on behalf of their deceased spouse. More than 1 in 4 find they can no longer afford to live in their current house. 

These are just a few of the issues that can suddenly arise after the loss of a spouse. One thing to keep in mind is that these obstacles are just that: obstacles. They can be overcome. The important thing is to just move forward. 

If you feel lost, call a financial advisor to help you make sense of everything. Many people think if they hire an advisor, they have to commit to a long-term relationship, but we can also step in as a stopgap to help you get through the weeds until you’re out on the other side.

3. Determine a Plan of Action

Now that you understand your situation and have clearly labeled all obstacles, you can start building your plan of action. 

Take the immediate action items and put them first. Then prioritize items that can wait and figure out when you can attend to them. If you can, consider waiting a full year before making any decisions on these items.

Chances are you did this earlier, but if you haven’t already, part of your plan of action should be informing relevant parties of your spouse’s passing, including life and health insurance. In addition, make sure to have all property titles updated to be in your name alone.

We recommend checking out Trish Lamb’s amazing resources over at Comfort in Their Journey on moving forward after losing your spouse. She provides amazing insights on everything from dealing with grief to how to sort out your estate plan.

If you don’t understand your current situation, then you will find it very hard to create a plan of action.

Understand Your Current Situation

In order to move forward, you have to know where you are now. Here is a checklist of accounts and logins to go over to get a full understanding of your current situation:

  1. Checking and savings accounts
  2. Investment accounts
  3. Recurring expenses
    1. Bills
      1. Mortgage
      2. Home insurance
      3. Life insurance
      4. Car insurance
      5. Electricity bill
      6. Gas and water bill
      7. Trash services
      8. Lawncare services
    2. Subscriptions
      1. Magazines
      2. Streaming services (Netflix, Hulu, Disney+, etc.)
      3. Memberships (AAA, AARP, HOA, etc.)
      4. Cell phone apps
  4. Sources of income
    1. Pension
    2. Social Security
    3. Life insurance
    4. IRAs
  5. Digital assets
    1. Social media accounts
    2. Email
    3. Benefits programs (frequent flyer, card perks, etc.)
    4. Other software

Items like online logins may seem less important, but digital estate planning is an increasingly essential part of preserving the legacy of you and your loved ones.

10 Questions to Help You Reassess Your Financial Needs

Whether you have a financial plan or not, and whether you’re already retired or still working, now is a time when you will want to reassess your financial needs. 

Use your budget as a starting point to look at your entire financial picture. As you shift from two income sources to one, consider how that will impact what you can afford to spend and save.

Here are 10 key questions to consider:

  1. Can I still afford to live in my current house?
  2. Should I downsize?
  3. Are there any ways I want to change the goals in my existing financial plan?
  4. How much do I need to save for retirement now that it’s just me?
  5. Does this change how much money I need in my emergency fund?
  6. Where will my spending need to increase?
  7. Where will my spending need to decrease?
  8. Which paid memberships/subscriptions do I still need and which can I drop?
  9. What elements of my support system are essential going forward and how will that impact me financially (e.g., if you need to move to be near children, or pay for care services)?
  10. What really matters to me most now? 

By answering these 10 questions, you will be well on your way to reconfiguring your financial situation to serve you well in this next chapter of life.

Create a Budget

After you have figured out your current situation and fully understand all the money that is coming in and going out each month, creating a budget can help you take further control of your finances (and avoid “Bag Lady Syndrome”).

If you have never budgeted before, here are a few tips to help you get started:

  1. Break out your spending by three high-level categories: save, spend, give. Save comes first because we believe in paying yourself first. Spend should include bills, groceries and other monthly expenses. Give includes any charities or religious organizations you donate to.
  2. Your household spending can most likely go down in many areas after the loss of a spouse—such as groceries, eating out, entertainment, clothing and other areas where you were once buying for two.
  3. Do a new budget every month to account for different events coming up, such as birthdays, trips, annual membership dues, etc.
  4. Include every dollar in your budget. Don’t leave anything unaccounted for. Money that is not earmarked for a specific purpose often ends up getting spent without realizing what you did with it. Taking control of your finances means fully understanding your cash flow. 

Reassess Your Estate Plan

You should review and/or update your estate plan whenever any significant changes happen in your life. As you reassess your finances and build a budget for your next chapter of life, it’s important to look at your estate plan and figure out what needs to change and what doesn’t.

Click here to download “The Next Chapter: A Financial Guide After Losing Your Spouse”

Update Beneficiaries

Update anywhere that your spouse was named as a beneficiary. Even if your will has a built-in backup plan stating who your assets should go to if your spouse has passed away, now is the time to go in and remove their name from your will and make sure everything is as neat and updated as it needs to be.

The last thing you want to leave your loved ones with is the potential of confusion and red tape getting in the way when executing your estate.

In addition to updating your beneficiaries, other areas you may need to update include:

  • Power of Attorney: To be clear, we’re talking about your power of attorney here. If your spouse was given power of attorney by you, it needs to be updated to someone else.
  • Healthcare Power of Attorney
  • HIPAA Authorization
  • Schedule of Assets

Common Scams that Target Widows

Sadly, widows are among the most common targets of scams—likely because of the high percentage of widows who were not the financial decision-maker of their household and therefore do not necessarily know what is needed and what is illegitimate.

The internet has made it easier to execute scams, thanks to social media and email. While most people are aware of the classic “Nigerian Prince” scam, scammers are constantly developing new ways to try to make a profit off of the vulnerability of others.

Here are a few of the most common scams to watch out for:

The Sweetheart Scam

This one involves someone striking up a friendship and developing trust through a deep emotional connection. 

Often done through social media, a scammer will typically connect with someone who is in mourning and begin sending messages of support that carry the promise of a new connection with someone to help the victim forget the heartache. 

As time goes on, the scammer will share a need for financial assistance of some sort, playing on the victim’s desire to care for them. They may repeat the same request multiple times before their identity as a scammer is uncovered, sometimes getting six figures out of their victims.

If someone who you met online ever asks you for any amount of money, chances are that person is a scammer. 

Tax Identity Fraud

After your spouse passes, you are due tax benefits. But scammers often watch the obituaries for the right person to pass away. With access to some basic personal information, they can file for a return on your departed spouse’s behalf.

In order to protect yourself from this scam, protect your and your spouse’s Social Security numbers above all else. Never send them via email, and only store them in digital vaults from trusted providers, like through your client portal with your financial advisor.

Questions to Consider as You Move Forward

Who or What Will Help You Move Forward?

Moving forward after a big transition can be difficult, and if you’re reading this book, chances are you have gone through one of the biggest transitions possible. It’s not easy, and no one should do it alone.

As you look toward the future, consider what you need in order to feel like you’re on the path to feeling better. 

This may be difficult at first, and that is totally fine. While it is important to consider, there is no rush to move on. Give yourself time.

One of our favorite books on the subject of moving forward is “Awarefulness: Journey from Misery to Joyful Living.” That subtitle says a lot, and it’s far much easier said than done. 

As you begin to consider the future, ask yourself a few questions:

    • What are my goals? These may change after the loss of a spouse as your previous goals as a couple do not necessarily reflect your goals as an individual. Give yourself permission to let go of goals that may have mattered more to your spouse than you.
  • Who can help me move toward these goals? Working toward goals requires commitment, and surrounding yourself with the wrong kind of people can prevent you from moving in the direction you want. Even people with the best of intentions can become a source of friction when they think they know what’s best for you.
  • What can help me move toward these goals? In addition to the people you want in your life, consider the things you may want in your life as you work toward your new purpose in life. Maybe you want to move into the city to be near particular activities, or you may want to remodel your house to make room for that workshop you’ve always wanted. 

What Obstacles Are in My Life?

In order to move toward your new goals and the next chapter of your life, it’s important to take an honest self assessment and figure out which obstacles you have put in your own way and how you can overcome them. 

Consider this list of the nine most common personal obstacles from Inc. magazine:

  1. Putting your goals off until “someday”
  2. Waiting until you “feel” ready
  3. Not anticipating tough times
  4. Viewing mistakes as failure
  5. Not prioritizing your goals
  6. Underestimating how difficult a challenge will be
  7. Giving up when results aren’t immediate
  8. Self-sabotage
  9. Setting the bar too high

Do any of those sound familiar to you? Write down some ideas on how you can change your mindset and help you move away from these self-defeating ideas in the future. 

What is My Purpose?

It’s common for couples to have a shared purpose for what they want to do in life, which is why it is also common for newly widowed individuals to feel purposeless and like they’re drifting out to sea with no direction.

It may be difficult to think that far back, but you were once single, too! While your idea of what your purpose is may have changed with time and maturity, you can still tap into that desire and drive to find meaning as an individual rather than a couple.

Keeping a journal around the idea of purpose can be incredibly helpful. Commit to 30 days of journaling for 5-10 minutes every day and see where that takes you.

Give Yourself a Break

Losing a spouse is tough, but remember this: You’re not alone. There are people who love you and a wealth of resources at your disposal.

Asking for Help (or Asking for Space)

When it comes to grieving, family and friends often default to giving too much space or being totally overbearing. Whatever your situation, if you find yourself needing a change in support, it’s important that you be able to voice that need.

Maybe your family is overwhelming you with questions and help. If people are reaching out too often, turn your phone off, or start saying no when people offer you help. You are the only one who knows what is best for you, and you have the power to make it happen.

On the other hand, maybe your family has all backed off, believing that you need more space than you actually do. If this is the case, give yourself permission to ask for help. This is often a difficult hurdle to overcome as many of us have the false belief that if we ask for help we will be viewed as needy or rude. 

The people who love you want to help you in whatever way they can. Find your voice to let them know what you need. You’ll be glad you did—and so will they.

If you want, you can have your family meet with your financial advisor. We are here to help you navigate difficult situations, so if we can help explain your situation to your kids or let them know what is off-limits, then we’re happy to do that. 

Resources to Help You Cope

We’ve shared a couple of our favorite resources already, but we’ll include them here along with others so you have them all in one place:

In Conclusion: You Don’t Have to Know Everything Right Away

We gave you a lot of food for thought in this guide, but before we go, we want to give you a few assurances:

You don’t have to have answers for everything. 

Don’t put too much pressure on yourself. 

Give yourself time to process and grieve.

When you’re ready to move forward, we would love to help you figure out your financial picture and build a path to your future. But whether you choose to work with us or not, we wish you the best.

Want to talk? Click here to schedule a consultation.

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