When You Lose a Loved One: Give Yourself a Financial Recess
One of the most gratifying things about being a financial advisor is having the opportunity to make a real difference in people's lives. In that context, we find it deeply meaningful if we are able to offer helpful financial advice during difficult times, such as when families experience the loss of a loved one. If you've been recently widowed (or you know someone who has), our greatest advice is often exactly the opposite of what you might expect: As much as you're able, it's time to take a financial recess.
Grief and mourning affect each of us uniquely, but all widows and widowers share a painful dilemma: On the one hand, the world seems to demand rapid response to a barrage of critical questions – financial and otherwise. On the other hand, it's usually a terrible time to be making big decisions, especially if they really can wait.
Thus, if you've just been widowed …
Don't decide anything you don't have to – especially about your finances.
When you're experiencing grief (which can take a year or more to play out), it's not just an emotion. It's a biological process affecting your ability to make rational decisions regarding your financial interests. Even small choices can feel overwhelming, let alone the big ones. That's why you're likely to be best off in the long run if you put off anything that can wait.
Most financial decisions are NOT as urgent as they might seem.
Service providers, friends and family (who may also be grieving) may mean well. But their sense of urgency – and your own – may be off-kilter. Basically, unless all heck is about to break loose if you fail to act, give yourself a break. Again, most financial decisions can wait.
Create breathing room, so you can focus on matters that actually are urgent.
Putting long-term plans on hold also helps create space to take care of the real essentials, such as making funeral arrangements, managing immediate expenses, and simply being kind to yourself and your dependents. Do make sure you've got enough cash flow available to make daily purchases and pay your bills, so these don't become a source of added stress. Gather imminently critical paperwork such as any pre-planned funeral arrangements, and multiple copies of the death certificate. It's also best to ensure your and your children's healthcare coverage remains in place. Let everything else slide for a little while, and/or …
Lean on others, even if you don't usually.
Don't go it alone. For practical and emotional support, turn to friends, family, clergy and similar relationships. For financial and legal interests, contact professionals like your financial advisor, CPA and insurance agent. Turn to relationships that help relieve your burden and avoid those that burn up your energy. Be cautious about forming brand new relationships at this time; unfortunately, seemingly sympathetic con artists prey on those whose defenses are down.
Revisit where you stand over time.
Again, everyone grieves in very different ways, according to different timetables. Take your own time! Once you do feel ready for some of the mid- and long-range logistics, slow and steady remain the ways to go. It can be helpful and cleansing to start by gathering up your scattered resources. Wills and trusts, insurance policies, financial statements, personal identification, mortgages, retirement benefits, safety deposit box contents, business paperwork, military service records, club memberships … Whether on paper or online, take stock of what you've got.
Keep reaching out.
Continue reaching out to others to address your evolving needs. Turn to your financial advisor to help organize and retitle investment accounts, claim your spouse's retirement and work benefits, and revisit your own and your spouse's Social Security benefits. Be in touch with your spouse's former employers. Work with a lawyer for settling the estate. Meet with an insurance specialist to revisit your healthcare coverage. Speak with your accountant about necessary tax filings. Contact creditors to resolve any outstanding debts. Firm up your ongoing banking and bill-payment routines.
Shift your focus outward.
When it comes to lifetime transitions, each of us is on our own schedule. But eventually, the time will come when you're ready to circle back to those larger decisions you put on hold. Again, don't go it alone. Your financial advisor can help you take a fresh look at your finances – your earning, saving, investing and spending plans. You also may start to look at your larger wealth interests, such as your will, trusts, overall insurance coverage and more. Whether you determine everything is fine or adjustments are warranted, wait until you're at a place in which you can make these sorts of decisions deliberately instead of in haste.
Are you in a position to pre-plan?
If you're reading this piece during happier times, we can't emphasize enough how important it is to pre-plan for when one or both of you pass away. Pre-planning can simplify or even eliminate some of the most agonizing decisions surviving family members must face during one of the worst times in their lives. As such, your wills, trusts, powers of attorney, living wills (advance directives) and pre-planned funeral arrangements may be among the most loving gifts you can give one another as a couple, especially if you have dependent children. If these key estate planning materials are not yet in place, there's no better day than today to give each other the gift of advance planning.
How else can we help? When you're ready to talk, please know we will be here to listen.