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Six steps to prepare for the inevitable loss of a spouse

April 5, 2021

Losing a spouse is a subject we tend to avoid. After all, it’s one of the most devastating events anyone can experience. But ignoring the inevitable is unlikely to do the surviving spouse any favors. There are six key steps to prepare for the death of a spouse.

While I luckily have not lost a spouse, I have dealt with the financial aftermath after the loss of my father. At the time of his terminal cancer diagnosis, my Dad (a single father) had successfully launched four kids and still had one at home finishing high school.

In the months before his death, I moved home to help manage the household, and I prepared for the task of running it by myself once he was gone. He showed me his system for paying bills, and I was able to take over seamlessly when he ultimately passed on. Had we not planned ahead, it would have been difficult to piece together on my own.

Working through the things you can expect after a spouse dies might help during an inherently difficult time.

Women are more likely to be unprepared

In a 2018 Merrill Lynch survey of widows, 53% said they and their spouse had done no financial planning in case one of them passed away.

Widows are less likely than widowers to say they are financially secure, knowledgeable about savings and investment issues, confident about their ability to live comfortably in retirement, and have a plan for income in retirement, according to a 2016 survey by the American College State Farm Center for Women and Financial Services. This is especially troubling considering that 80 percent of married women outlive their husbands, according to the U.S. Census Bureau.

Not planning for what happens after the loss of a spouse could result in some surprises and create unnecessary roadblocks. For example:

  • Being unaware of your entire financial picture could mean you won’t know where to start when you need to access liquidity after a loss.
  • Neglecting to add both your names to important accounts could mean you may not be able to access funds right away and may need to borrow money to get through what could be a lengthy probate process.
  • Not knowing digital passwords or knowing where to find them can leave you shut out – at least temporarily – of important accounts and information.
  • Not knowing how to use your budgeting software or process may make it difficult to maintain your current standard of life and ensure bills are paid on time.

How to prepare for the death of a spouse

Open dialogue, solid planning, and ongoing support can help make the best of what’s to come. The following six steps can help you avoid making hasty or uninformed decisions after the loss of a spouse.

  1. Talk: Make it a habit to discuss finances and accounts with your spouse – regularly. After just one or two times, you will begin developing a solid plan as a team. Involve your financial advisor as topics and tasks become complex.
  2. Tell others: Along with your advisor, share your plan with your adult children (if you have any), the executor of your wills and perhaps a close friend or two.
  3. Create a repository: Include account numbers and passwords, security codes and PINs, key contacts, location of important papers, and any other critical information. Store this sensitive data in a secure place, perhaps an encrypted drive or a safe deposit box.
  4. Consolidate: Managing multiple accounts, especially ones of relatively small value, can be tedious. Consider consolidating everything into as few places as make sense for your situation. Not only will it be easier to manage, but it will be easier for both of you to see and assess your financial big picture.
  5. Stay current: Update wills, powers of attorney, healthcare directives and beneficiaries. Ensure accounts are in both your names and titled properly.
  6. Maximize Social Security: Talk with your advisor about the claiming strategy options you’ll have as a survivor, including any dependents you may have. You’ll want to maximize every source of income, and Social Security is an important one.

Set priorities after the loss

Facing the emotions and potential financial fallout of losing a spouse can be incredibly overwhelming.

Your financial advisor, accountant, and attorney can be sources of support. They can help you sort out which steps need to be taken almost immediately and which can be put on hold while you gather enough emotional strength to move forward.

Filing for survivor’s Social Security benefits, obtaining death certificates, and filing as beneficiary for a spouse’s retirement accounts are among the tasks to work on first. Once you’re ready for more in-depth guidance and action, you can re-engage with those trusted advisors on the next steps.

By developing a plan, you can help better navigate your future and feel more empowered when the inevitable happens. If you start now, your spouse will be by your side to help you see a clear way forward for when he or she is gone.

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