If you’re dealing with the death of a spouse, there are no words that can express the grief of this loss.
First and foremost, it’s important to take care of yourself and your loved ones during this difficult time. Acknowledge the emotional toll that death can bring, and reach out for support from family, friends, or grief counselors.
Once you’re ready to begin addressing financial matters, there are a few initial steps you should take.
Immediate Financial Steps After the Death of a Spouse
While it’s tough to focus on finances during such an emotionally trying period, there are a few crucial steps you must take.
Notify Institutions and Authorities
The first step is to notify the relevant financial institutions and authorities about your spouse’s passing. This can include the Social Security and Medicare office, the IRS, banks, insurance companies, pension or retirement plan providers, credit card companies, and more. You will likely need copies of your spouse’s death certificate and their Social Security number when contacting various agencies.
Gather Important Documents
Next, it is important to collect all relevant financial documents, such as tax returns, bank and investment statements, life insurance policies, pension plans, will or trust documents, and any other related records. Getting organized can help you get an overview of your financial situation and begin evaluating life insurance, accounts, property, assets, income sources, and liabilities.
Assess Your Immediate Financial Needs
In the immediate aftermath, it’s important to have a clear understanding of your ability to meet your short-term needs. This includes checking available balances in your accounts, evaluating income sources, and understanding your immediate expenses. This will help you manage your financial life in the short term and stay ahead of any issues by understanding your current income and expenses.
By completing these three steps, you will have met your immediate needs and taken care of any urgent financial issues.
Going Forward: Evaluate Your Financial Situation
Next, it’s time to ensure your long-term finances are in order and that you’re making the right decisions for your future.
First, Review Accounts and Assets
Begin by examining all financial accounts, including checking, savings, retirement accounts, and any other investments. You’ll want to take note of all balances and consider any changes that might need to be made, such as updating beneficiaries or retitling accounts.
Second, Identify Income and Benefits
Next, identify all sources of income and benefits. This may include your personal earnings, Social Security benefits, pension payments, or an annuity. Don’t forget to consider benefits you may be eligible for due to your spouse’s passing, such as life insurance payouts, survivor benefits, or pension benefits from your spouse’s employer. Collect all related documents and maintain a record for future reference.
Third, Calculate Debts and Liabilities
Lastly, tally all debts and liabilities. This likely includes mortgages, car loans, credit card debts, and any other personal loans. Make a list of due dates and minimum payments to ensure all obligations are met on time. Understanding your liabilities is a crucial aspect of gauging your financial health and planning for what lies ahead.
Once you’ve completed these steps, you should have a clear outline of your balance sheet, giving you a snapshot of your current net worth.
As you go through this process, you may find yourself overwhelmed or out of your element. Just remember, you do not have to do this alone, and it may be helpful to work with a trusted professional.
Consider Working with Professionals
This can be an incredibly stressful and complicated process at an emotionally challenging time.
Don’t feel that you need to do this alone. Professionals like financial planners, lawyers, and accountants can prove invaluable in these challenging times. They can help you understand exactly what you need to do to navigate this trying time, all while accounting for your unique situation and goals.
Next Steps: Handling Long-Term Financial Changes
Losing a spouse is life-changing and can cause many to rethink their plans.
In addition, the reality is that even if your plans stay the same, there are aspects of your financial plan that have changed, from different spending targets to potentially different income streams.
Here are the next steps for handling the long-term financial changes you may experience.
Evaluate Your Financial Goals
Once you feel up to it, consider reevaluating your financial goals. Keep in mind things are different now, and some of the goals you had before may no longer be a fit, and there may be new goals and priorities that you want to focus on as well. Give yourself some freedom to dream and think deeply about what you want to achieve with your finances.
Budget and Adjust Spending as Needed
Next comes the critical task of budgeting and adjusting your spending as needed. Your income and expenses have likely changed, and your budget should reflect these changes. It’s helpful to create a budget that illustrates your income, taxes, and expenses so that you can make informed decisions.
Reassess Investments and Retirement Plans
Finally, it might be necessary to reassess your investment strategy and retirement plans.
If you previously made these decisions together with your spouse, now it’s time to review them independently. Consider consulting with a financial advisor to understand how your new circumstance impacts your risk tolerance, investment horizon, and retirement goals. If you don’t feel able to manage your investments alone, consider hiring a trusted advisor to manage your portfolio on your behalf.
Embracing Support and Well-Being
Above all else, remember that it’s okay to lean on others for support.
Surround yourself with a network of trusted friends, family, and professional advisors. They can provide emotional comfort, practical help, and valuable advice when you need it the most.
Prioritize your emotional well-being. Grief can be overwhelming, and it’s important to give yourself permission to feel and heal at your own pace. Consider consulting with a mental health professional. Finally, engage in self-care activities that nurture your mind and body. A healthy mindset can positively influence your ability to make sound financial decisions, offering a sense of stability in an often chaotic time.
Bottom Line
At the end of the day, navigating your financial journey following the death of a spouse involves a series of crucial steps.
It begins with gathering important documents, notifying institutions, and evaluating your current financial status. From there, reassessing your investments and retirement plans to align with your new circumstances will help you navigate the path ahead. However, it’s important to remember that you don’t need to do it alone. Seeking professional advice can give you the confidence you need. Similarly, leaning on your support network can provide emotional strength and support, easing your journey.
Lastly, remember that you are resilient, and you can do this.
