Whether anticipated or not, the death of a spouse may be one of life’s most emotionally devastating events. Financial issues often compound the problem, as you’re left to contemplate a future not only without your life partner, support system, and confidant but also without a principal source of family income. It’s a heavy burden to bear.
Nevertheless, once you feel you’re able to cope, consider these “baby steps” that can help you get back on a better path.
1. At first, do nothing. After a spouse dies, you’ll probably have a thousand things running through your mind and a million things you think you should be doing. But don’t start flailing wildly. In particular, avoid making life-altering decisions—selling your house immediately or dumping business interests at bargain-basement prices—for at least a year. It’s much better to take some time to collect your thoughts and gather the information needed to make rational choices.
2. Get organized. Some things can’t wait, of course, and as you continue to pay your bills, begin to line up all of your important financial documents and conduct an inventory of all your assets and liabilities. Locating some key items may be difficult, so don’t panic if you can’t find them right away. Some of your best resources may be:
Previous tax returns
The benefits administrator at your spouse’s job
A family attorney, accountant, or financial advisor
3. Give yourself room to maneuver. Once you have all your important papers in hand, find a place you can keep the documents and work undisturbed. That might be a desk in a den or in another little-used area of the house, or even the dining room table. Try to accomplish at least one task each day, even if it’s just making one phone call or paying a bill. Soon, you’ll notice you’re making progress.
4. Get at least a dozen copies of the death certificate. You’ll need these to notify a wide range of parties, including:
Life insurance companies
Credit card companies
The Social Security Administration (SSA)
The state’s office for inheritance tax
Your legal, accounting, and financial advisors
5. Decide what to do with life insurance proceeds. Don’t make knee-jerk choices about how to invest the money. But until you’re ready to make long-term plans, it makes sense to put the proceeds to work in a modest way in secure, short-term investments. Those might include money market funds, certificates of deposit (CDs), or U.S. Treasury bills.
6. Contact the SSA. You can call Social Security at 800-772-1213 to apply for survivor benefits. An SSA representative may be able to walk you through the process over the phone, or you can visit a local office. Also, more information about Social Security benefits is available at www.ssa.gov.
7. Beware of “hot tips.” Once your spouse’s obituary appears in the papers, you’ll likely be swamped by advice from all quarters. Some of it may be well-intentioned and even valuable, but be wary of “can’t miss schemes” or investments that seem too good to be true. And watch out for articulate con artists who make a living preying on those who may be emotionally vulnerable and concerned about their finances. If someone calls about an investment guaranteeing a 25% return, hang up the phone. Take the time to sift through reasonable investment options.
8. Keep up with your obligations. Failing to make required payments on credit card accounts or utility bills can result in hefty interest charges and late fees and will tarnish your credit report. But if you’re unfamiliar with your family’s financial obligations, don’t assume that all charges are accurate. Question anything that seems odd.
9. Assess your assets and liabilities. When you have all the information you need, develop an overall financial picture. Include all retirement plans and IRAs, Social Security benefits, and prior investments in your bucket of assets. But be realistic about what you have now and whatever future projections have already been made. Don’t be swayed by “pie in the sky.”
10. Seek outside assistance. Fortunately, you don’t have to do everything by yourself. The last and perhaps the most important “baby step” is to find a professional financial advisor who has the experience and expertise to help you navigate through difficult times. If you would like to know more about our credentials and the services we provide, please call our office.
This article was written by a professional financial journalist for lm financial and is not intended as legal or investment advice.