How Should Your Financial Strategies Change After Losing Your Spouse?

By Ginger Weber | June 24, 2016

Coping with the loss of a spouse is one of life's greatest challenges. Unfortunately, at a time when you're already feeling emotionally shocked, raw and vulnerable, it's also a time when you need to make tough financial decisions to ensure your future security -- but you may be left wondering exactly what to do first. 

Ginger Weber is a CFP, Certified Financial Planner and a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt County Given that the median age of widowhood is just over 59 years, preparing for the unexpected is a difficult, yet necessary, reality. These tips can help you adjust your comprehensive financial plan and deal with the loss of your spouse. 

Understand how the Probate Process Affects Asset Management

The probate process can be complex, and many misunderstand exactly how it works to their detriment. Simply put, when someone dies, all their assets must transfer. The first step in avoiding probate is to collect all relevant documentation and account information to determine how assets are titled so they can be properly designated.

Say, for instance, you held a joint account with your spouse. On their death, the account will transfer to you, as the surviving spouse, or to a trust, if a trust was created without going to probate. If, however, the account was held in your spouse's name alone, it will transfer to probate -- even if you have power of attorney or if there's a will. 

Avoid these asset management complications by ensuring that all assets are properly titled before it becomes an issue.

Avoid Making Sweeping Changes to Your Financial Strategies

After the death of a spouse, you're feeling emotional; after all, your world has been turned upside down. Needless to say, now is not the time to make huge financial decisions. You may feel the urge to buy an expensive new car, take a luxurious vacation, or give large gifts to your kids or grandkids. 

While these urges are understandable -- and common after a loss -- it's important that you clearly examine your financial situation and determine whether or not you can truly afford to be so generous at this stage. 

Ensure That You Collect All Benefits Due

Upon a death, you may be eligible to collect a number of benefits. Don't miss out on what's due; you may be eligible for:

  • Life insurance
  • Social Security
  • Pensions
  • Transfer on/Payable on death assets such as jointly held accounts
  • Individual Retirement Accounts (IRAs)
  • Payments from military organizations, labor unions, credit unions, or fraternal organizations

When you're in the midst of the grieving process, it can be easy to overlook some of these sources. Stay on track by keeping a list of assets or income sheets that detail each source, with information such as account numbers, titles, and transfers. Your wealth advisor may be able to help you organize this data.

Beneficiary and Ownership: Making Changes

You'll need to update ownership and beneficiary information on several accounts, including:

  • IRAs
  • Pensions
  • Wills
  • Powers of Attorney
  • Home and car titles
  • Car and liability insurance
  • Bank and other financial accounts

Don't Face These Challenges Alone: Ask for Help From Your Wealth Advisor

Ginger Weber is a CFP, Certified Financial Planner and a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt County

Finally, though you may feel alone, you don't have to face these challenges by yourself. Now is the time to call upon your trusted wealth advisor to help you make the hard decisions. In addition to your wealth management advisor, you'll want to assemble a team of professionals on your side, such as an estate planning attorney and a certified public accountant. 

Though it's not a topic anyone relishes discussing, preparing for the death of a spouse ahead of time -- as much as possible -- will help ease the transition when the time comes.

Posted in Financial Planning