Grappling with the loss of a loved one is the most difficult time in one’s life. Often, after years of working with an affluent couple, we find ourselves guiding the surviving spouse through the financial aspects of this major life change. Generally, it’s the husband who passes first, so quite often we’re working with the wife. However, in some instances, it is the husband who survives and seeks our assistance.
Over the years, we’ve helped many surviving spouses manage their money and avoid pitfalls. In this blog, we’ll share six of our top tips for making the financial aspects of this transition a little less stressful.
1) Try Not to Let Money Worries Consume You
Often when the first spouse dies, there’s more anxiety and a sense of the unknown when it comes to money. After losing a spouse, the surviving spouse may fear losing their financial security, particularly if they were not the primary partner managing the family finances.
It is not uncommon for us to encounter a surviving spouse who is afraid they’ll run out of money, that they’ll wake up one day and their sense of normalcy will be turned upside down financially. If this is something you worry about, share your concerns with your wealth management team. If you do it ahead of time, you’ll have one less thing to worry about as you grieve the loss of your loved one.
2) Have a Few Months of Reserves in Your Checking Account
Right after the death of the spouse, monthly cash flow is likely to be impacted. If the couple is retired and both drawing social security, one of those benefits will go away. There may be a pension that goes away as well. That’s why it’s important to have your checkbook in order and have a few months of cash reserves, so you have enough cash to deal with these changes. You’ll also need extra money to cover the immediate bills associated with the death of your loved one.
It’s also a good idea to think ahead of time about what your monthly budget might look like without one spouse. If you’ve gone through this exercise, you’re more likely to feel secure about money during days and weeks immediately following the loss.
3) Leave a Breadcrumb Trail
Most couples don’t think about this, but it’s important to be familiar with all the details of what each other does to keep the household running. For example, if you bank or bill pay online, do both have access to these accounts? Or do you have each other’s log-in credentials?
During grieving, things like bill paying are already more difficult than usual. If you don’t have access to what you need or easy ways to get it, it can add to your burden. While these aren’t easy things to think about ahead of time, with proper planning and documentation, you should be able to open the file drawer or the electronic folder and have everything you need. Password apps are popular tools that can track all your passwords in one place. With your spouse’s master password, you’d be able to readily access your bank brokerage accounts.
4) Avoid Changes in Your Spending Habits
We sometimes see widows and widowers increase their spending, whether it’s buying something frivolous or giving money to family members. After the loss of a spouse, it’s easy to feel vulnerable and look for ways to fill the tremendous void in your life. Or you may be tempted to ease the burden of a grieving family member with financial difficulties.
Try not to make any major purchases, rash decisions or significant changes to your spending habits right away. If you’re struggling with whether a financial decision is sound, seek advice. For example, you may want to sell your home because the memories are too painful. Sometimes selling your house is the right decision, especially if it’s too large and the expenses are high. But depending on how the home fits into your net worth or if it’s a down real estate market, it may be the wrong move. Your wealth management team can be a great source of advice because they can help you look at the situation more objectively.
The risk of overspending during this time is that your wealth may not last as long as you intended, or you may have to make scale back how you live, both of which can have a devastating impact on a grieving widow or widower.
5) Trust Your Plans
Hopefully, you and your spouse have been working with trusted financial and legal advisors, putting plans in place for the eventuality that one of you will survive the other. With our clients, typically we’re meeting with the husband and wife together, helping make sure they have their estate plans in order.
If you’ve done this planning, try to take comfort in this during the early days of this life transition. Depending on how much planning you’ve done prior to becoming a widow or widower, you’ll want to seek financial advice to ensure you understand your income sources and your spending, so you can maximize your assets across your lifetime.
6) Lean on Your Team
There are many financial matters to sort through after the loss of a spouse. If you’re feeling overwhelmed about day-to-day money matters, turn to your financial team for support. Sometimes our clients ask us to help organize a monthly budget, so they can more fully understand what living within their means looks like. Others ask us to take on the financial management either temporarily or permanently. If you find yourself in need of assistance, know that there are resources available to help.
With the loss of your spouse, you have also lost your partner and sounding board for financial decisions. As you face decision making on your own, you may want the advice of a financial partner. If you have a wealth manager that you and your spouse worked with previously, this person can provide continuity due to their familiarity with your financial situation, along with the added benefit of being someone you already know and trust.
When you’re ready, meet with your wealth management team for reassurance about your overall financial picture. Our role is often to assure the survivor that the thinking is sound and that the plans they have in place will get implemented.
The loss of a spouse is one of life’s most difficult changes. It is never an easy road, but with the right plans in place and the right financial team by your side, you can put money matters aside and focus on your grief and recovery. Contact us today to learn how The Fiduciary Group can ease this transition for you and your family.
This article does not represent a specific investment recommendation. No client or prospective client should assume that the above information serves as the receipt of, or a substitute for, personalized individual advice from The Fiduciary Group which can only be provided through a formal advisory relationship. Clients of the firm who have specific questions should contact their The Fiduciary Group advisor. All other inquiries, including a potential advisory relationship with The Fiduciary Group, can be directed here.