The loss of a spouse can be a devastating, life-changing event. Due
to longer life expectancies, women are more likely to face this
situation. According to the U.S. Census Bureau, 40% of women age 65 and
older are widows compared to 13% of men, and it might surprise you to
know that women are widowed at an average age of 56.*
Becoming a widow at any age can be one of the most difficult
challenges a woman must face. Not only is there the emotional loss of a
husband, but also the task of handling everything--including all the
finances--without the help of a spouse. Even if you've always handled
your family's finances, the number of financial and legal matters that
have to be settled in the weeks and months following your loved one's
death can be overwhelming.
Sadly, for many women, becoming a widow is a first step toward economic
hardship. That's why it's critical for you to organize your finances
after your spouse's death and take ongoing steps to secure your
financial future and that of your family.
First, take a deep breath. Before you start handling the financial
end of things, though, make sure to consider your own needs. The period
following the death of a spouse can be a blur of emotions--shock,
sadness, despair, anger, denial. It's important to allow yourself the
freedom to feel however you want to feel. You don't owe it to anyone to
feel or act in a certain way.
Facing your loss can ultimately help you as you work to adapt to the
new conditions of your life, so that in time you can create something
new. This period of adjustment, which can last for several years, is
often a time of profound self-discovery for women, who may find
themselves examining issues of identity, life meaning, and aging. During
this time, it's important to surround yourself with people you
trust--family, friends, support groups, professionals--who can offer
support and advice that's in your best interest.
The short term: steps to take. There are several financial tasks
that must be done in the weeks and months after a spouse's death. If
some matters are too overwhelming to tackle alone, don't hesitate to ask
family or friends for help.
Locate important documents and financial records. In order to settle
your husband's estate, you'll need to locate a number of important
documents. These include your spouse's will and other estate planning
documents (e.g., trust), insurance policies, bank and brokerage
statements, stock and bond certificates, deeds, Social Security number,
birth and marriage certificates, and certified copies of the death
Set up a communications tracking and filing system. To help keep
track of all the details, set up a system to record incoming and
outgoing calls and mail. For phone calls, keep a notebook handy where
you can write down the caller's name, date, and subject of the call. For
mail, keep track of what you receive and whether a response is required
by a certain date. Make a list of the names and phone numbers of the
people and organizations you're dealing with and post it in a central
location. Finally, create a filing system for important documents and
correspondence with separate folders for different topics--i.e.,
insurance, government benefits, tax information, bank records, estate
records, and so on.
Seek professional advice to settle the estate and file tax returns.
Getting expert help from an attorney, accountant, and/or financial and
tax professional can be invaluable during this stressful time. Consider
bringing a family member or friend with you to meetings so you will have
an extra pair of eyes and ears to process information.
An attorney can help you review your husband's will and other estate
planning documents and start estate settlement procedures. If you are
named executor in the will (or if you are appointed as the personal
representative), you will be responsible for carrying out the terms of
the will and settling the estate. Settling the estate means following
certain legal and administrative procedures to make sure that all debts
of the estate are paid and that all assets are distributed to the
rightful persons. An attorney can tell you what procedures to follow. A
tax professional can help you file certain federal and state tax returns
that may be due. A financial professional can help you by conducting a
comprehensive review of your financial situation and identifying any
retirement and survivor's benefits that may be available to you.
Apply for benefits. You'll need to contact several institutions for information on how you can file for benefits.
Life insurance--Life insurance benefits are not automatic; you have to
file a claim for them. This should be one of the first things you do.
Ask your insurance agent to begin filing a claim (if you don't have an
agent, contact the company directly). Most claims take only a few days
Social Security Administration (SSA)--Contact the SSA to see if you
and/or your dependent children are eligible to file a claim for
retirement, survivor, or death benefits.
Employers--Contact your spouse's most recent and past employers to
find out if you are eligible for any company benefits. If your husband
was a federal, state, or local employee or in the military, you may be
eligible for government-sponsored survivor's benefits.Update account
names. You may need to contact financial institutions to change account
names and/or update contact information.
Evaluate short-term expenses. You may have immediate expenses to take
care of, such as funeral costs or outstanding debts your husband may
have incurred. If you're waiting for insurance proceeds or estate
settlement money, you can use credit cards for certain expenses or you
can try to negotiate with creditors to allow you to postpone payment for
30 days or more, if necessary. Make sure you have one or more credit
cards in your name, and when you can, order a free copy of your credit
report and review it for accuracy.
Avoid hasty decisions. For discretionary financial decisions, go at your
own pace, not someone else's. For example, don't commit to move from
your current home until you can make a decision based on reason instead
of emotion. Don't spend money impulsively. Don't cave in to pressure to
sell or give away your spouse's possessions. Find out where you stand
financially before you make any large purchases, sell property, or loan
money to others.
Moving ahead: the big picture. After the initial legal and financial
matters related to your spouse's death are taken care of, you'll enter a
transition phase when you'll be adjusting to your new financial
circumstances. As you navigate this terrain, you might find it helpful
to work with a financial professional who can help you by:
- Suggesting ways to invest any life insurance proceeds or estate settlement money you receive.
- Calculating your net worth by identifying your assets and
liabilities, giving you an understanding of how you'll meet your short-
and long-term spending needs
- Establishing a budget by looking at your monthly income and routine living expenses, and making adjustments as needed
- Helping you update beneficiary designations on your life
insurance, retirement plan, IRA, employee benefits, annuity, and so
onReviewing your investment portfolio at least annually
- Updating your estate planning documents (e.g., will, trust,
health-care directives, power of attorney) to reflect your circumstances
and your wishes for disposition of the marital estate (e.g., gifts to
children, grandchildren, charities)Updating your insurance coverage to
reflect your new circumstances
- Generally speaking, women may have a different set of
expectations and requirements from their financial professional than
men. As you work with a financial professional, make sure he or she is
responsive to what you say you need, not what your advisor thinks you
want. Don't be afraid to ask questions, and make sure you understand all
your options before making important decisions.
As you move forward with your life, remember that at times it may be
two steps forward and one step back. Take comfort in the fact that you
are doing the best you can to make the best decisions--financial and
otherwise--for yourself and your family.
* National Center for Women and Retirement Research