By Kim Segal, CFP®
When you say, “I do” and start your marriage, the last thing you’re thinking about is the potential death of your spouse. We get it. It’s heart-wrenching and uncomfortable. But do you know what’s even worse? Being caught unprepared as you wade through what feels like insurmountable grief. And considering the difference in life expectancies of men and women, widowhood is a possibility you need to take seriously.
While there is really no way to prepare emotionally for the loss of a life partner, you can prepare financially. Spending a little time and effort in advance to ensure you can answer the following questions will ease the burden if you find yourself in the excruciatingly difficult time of widowhood. So ask yourself, “If I were widowed tomorrow, would I be prepared?”
Do You Have a Trust in Place?
If your spouse doesn’t have a trust, they need to draw one up immediately. A trust ensures that your spouse’s assets are protected and are given to the right heirs in a seamless way. Unlike a will, trusts allow the owner to determine how their estate is disbursed rather than just listing their wishes. In addition, trusts do not need to go through the long and complicated process of probate that wills do, and they cannot be challenged. Without a trust, it takes a lot longer to get closure and all the details can get messy in the process. If your spouse does have a trust, make sure it’s up to date and that they have worked with a professional to get all the legalities in place.
Have You Organized Your Documents?
In the aftermath of your spouse’s passing, their will is not the only document you will need. Your marriage certificate, their birth certificate, and their Social Security card will be required to do things like request benefits or change the name on your car titles. Make sure you know where all this paperwork is located, in addition to automobile titles and property deeds.
What Benefits Are Available to You?
When your spouse dies, you will be entitled to Social Security benefits and possibly other assets like pension benefits, life insurance, and annuities. If they are still working, there’s a good chance you will be eligible for benefits through their employer which you are unaware of. Have your loved one make a list of all the benefits you will receive at their death, and ensure you have the necessary information to claim them.
Do You Have Access to All Financial Account Information?
You probably have a checking account, savings account, retirement, and other investment accounts. When your spouse dies, the management of them will fall to you. Therefore, you need a list of every account you have, whether joint or in only one of your names, the type of account, the institution that holds it, and the account number.
In addition to your assets, you have liabilities, such as debts, insurance, and monthly utilities. Since you don’t want to default on your mortgage while you’re trying to cope with your loved one’s death, record the relevant information for these accounts as well, including how and when payments are made.
What Does Your Spending Plan Look Like?
An important part of developing a plan to move forward alone will involve knowing your current spending needs. If you don’t already have a written budget, begin tracking your expenses and create one. It will be an incredible aid when planning for the future.
Do You Have a Trusted Advisor?
Having a strong support system will carry you through the death of your spouse and give you the strength to move forward. Part of that support system should be a trusted financial professional. In many marriages, the husband handles the finances and it is he who has a relationship with the family’s financial advisor. If it is he who passes first, his wife inherits an advisor she may not know well or necessarily trust.
It is vital you have someone you trust that you can turn to for help in financial matters. Widowhood is an extremely vulnerable time, and many unscrupulous people prey on widows. Take some time now to get to know your financial advisor and make sure you like working with them. Your well-being is of the utmost importance, so if necessary, find another advisor.
You’re Not Alone
One thing you’ll never regret is preparing for possible widowhood before it happens. At Catalyst Investment Management, we aim to arm you with a solid financial foundation and empower and educate you to make decisions that are right for your life. As you prepare for widowhood, we are here to answer your questions. Schedule a call by reaching out to us at (617) 610-0587 or emailing firstname.lastname@example.org.
Kim Segal is co-owner and CERTIFIED FINANCIAL PLANNER™ professional at Catalyst Investment Management, an independent firm dedicated to providing personalized financial advice and planning. With over 20 years of experience, Kim is passionate about developing long-term relationships with her clients so she can provide them with customized solutions that make the most impact on their lives. Kim specializes in serving business owners and pre-retirees and post-retirees who desire a road map to their ideal retirement and women who are recently divorced or in the process of getting a divorce. Every client of Kim’s receives her utmost dedication and attention as they work toward their goals. She graduated from Boston University with a bachelor’s degree in business administration and spent much of her career prior to CIM at Charles Schwab, where she held various roles, including financial planner, vice president, and financial consultant. Outside of work, Kim loves spending time with her two teenage children, cooking, and staying active by running and skiing. Learn more about Kim by connecting with her on LinkedIn.